ALCIDION
(ASX:ALC)
ANNUAL
REPORT
2020
For personal use only TRANSFORMING
HEALTHCARE TOGETHER
The continued uptake of Alcidion’s products in the past 12-months has validated
how we add value to the existing technology used by healthcare providers around
the world. We have more hospitals, more beds, and more active users than ever
before using our platforms.
The market opportunity for Alcidion is rapidly expanding. Across our markets,
with support from policy makers, we are seeing unprecedented levels of
investment being made in digital solutions to drive better patient care.
EVOLVING OUR PRODUCTS
In FY2020 we launched our new growth plan, raising $16.2 million to invest in expanding our product,
sales and implementation capabilities to aggressively pursue this significant opportunity.
We have extended our ability to support healthcare providers and ultimately patients with an evolved
product offering that has given depth and breadth to our solution. To better position this with our
customers, we are repositioning our product offering in all markets, consolidating our products
under the flagship Miya Precision banner.
307
UK, Australia,
New Zealand Hospitals
63
50K
Healthcare organisations
Beds using our technology
Our flagship product suite
Miya Precision is a smart clinical
solution based on a FHIR-event
platform that enhances healthcare
organisations’ existing IT investments
by establishing a system of engagement
aligned with clinical workflows. The new
Miya Precision model encompasses 16
product modules to allow existing and
prospective customers to tailor
a package for their unique needs.
Patientrack is included in the Miya
Precision product modules and will
be referred to as Miya Observations
and Miya Assessments.
68K
Active users
1.3B
Observations recorded
16.3M
Alerts generated
Taking Health IT solutions
to the next level
Instant clinical
communication
Alcidion Services include
project management, data
and analytics, implementation
consulting, integration and
support services for digital
health projects. Alcidion has
several reseller agreements
for leading complementary
software platforms, completing
our offering as a full-service
health IT provider.
Smartpage is a smartphone
and web-based system for
hospital communication
and task management,
addressing the requirements
of both clinical and non-
clinical users. It facilitates
rapid, reliable and
comprehensive messaging.
1
For personal use only FY2020 HIGHLIGHTS
$18.6M
REVENUE
10%
REVENUE GROWTH
DESPITE COVID IMPACT
35%
GROWTH IN RECURRING
REVENUE VS FY2019
SIGNIFICANT INVESTMENTS
MADE TO DRIVE GROWTH IN
UK AND ANZ MARKETS
$3.8M
EBITDA LOSS, REFLECTING
H2 INVESTMENTS FOR GROWTH
$15.9M
CASH BALANCE,
WELL-CAPITALISED
TO DRIVE FURTHER
EXPANSION
STRATEGIC CONTRACTS
SIGNED IN THE UK AND ANZ
WITH OPPORTUNITIES TO
EXPAND SCOPE
SOLID GROWTH IN PIPELINE
OF SALES OPPORTUNITIES
TABLE OF CON TENTS
TRANSFORMING HEALTHCARE TOGETHER
FY2020 HIGHLIGHTS
LETTER FROM THE CHAIR
A YEAR OF INVESTMENT, INTEGRATION
AND GROWTH
Q&A WITH MANAGING DIRECTOR KATE QUIRKE
CASE STUDY
DIRECTORS’ REPORT
REMUNERATION REPORT
AUDITOR’S INDEPENDENCE DECLARATION
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REVIEW REPORT
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
ADDITIONAL SHAREHOLDERS’ INFORMATION
CORPORATE DIRECTORY
P.1
P.2
P.3
P.5
P.6
P.8
P.10
P.13
P.21
P.22
P.23
P.27
P.31
P.60
P.63
For personal use only LETTER FROM
THE CHAIR
ALCIDION ANNUAL
REPORT 2020
Dear Shareholders,
I am pleased to present Alcidion’s Annual Report for
the Financial Year ended 30 June 2020 (FY2020).
I hope this report finds you and your family well
amidst the ongoing COVID-19 pandemic.
Against the backdrop of a global pandemic, Alcidion
has demonstrated that it is a resilient business, and
its technology plays a vital role in helping healthcare
providers better manage risk, use resources
effectively and drive better patient outcomes.
Despite the challenging market conditions arising
during the second half of the financial year, FY2020
has been one of continued growth. During the year
we signed several strategically significant contracts
in each of our markets, increased our foothold in
the rapidly growing UK market, made investments
to expand our sales and product delivery
capabilities, and enhanced our platform to meet
new healthcare needs. Importantly, we continued
to develop our product suite and improve the way
our solutions are sold as an integrated offering
as well as invest in the systems and capabilities
of the business to support future growth.
From a financial perspective, we are pleased
to report year-on-year growth in revenue,
with $18.6M for the full year. Our balance
sheet remains strong, following our successful
capital raising in November 2019.
CAPITALISING ON A SIGNIFICANT
MARKET OPPORTUNITY
At the beginning of the financial year we set out our
growth strategy, positioning Alcidion to capitalise on
the increasing market opportunity across the global
healthcare sector arising from the accelerating
adoption of digital enabled healthcare. Enhanced
clinical decision support combined with technology
enabled patient care are set to transform traditional
models of care, with governments and healthcare
providers committing the funding required to make
it happen. Alcidion products are exceptionally well
positioned to not only participate in, but indeed
drive this transformation. We offer the only solution
that combines AI and clinical decision support
systems, electronic patient observations and
assessments, mobile electronic records, patient flow
management and advanced clinical communication.
The UK market is a prime example of this healthcare
shift. The Government has committed to driving
digital adoption across the entire National Health
Service (NHS), including establishing a Digital
Aspirant programme as well as providing targeted
funding to increase adoption of medications
management and clinical communication solutions.
The UK Health Secretary, Matt Hancock, has been
highly vocal in his commitment to supporting
the entire NHS to achieve digital maturity. These
investments form just part of the government’s
£20 billion increase in funding to the NHS over
five years, as part of its Long Term Plan.
Given the enormous market potential and the
accelerating timeframes in which the sector is
looking to achieve further digital transformation,
it was vital that our growth strategy was supported
by a commitment to scale up Alcidion’s sales,
marketing and product implementation capabilities,
in addition to product development. Accordingly,
we raised $16.2 million via an institutional
placement in November 2019 to provide
the funding required to both scale the
existing business and investigate potential
acquisitions aligned with our strategy.
Scaling up commenced at the beginning of this
calendar year with the restructuring of our
UK operations under the leadership of newly
appointed UK General Manager, Lynette Ousby.
This included significantly expanding our UK sales
team which will enable us to expand our footprint
in this market, partnering with NHS Trusts who are
pioneering change in using technology to deliver
better patient outcomes. We are also positioning
Alcidion on UK government procurement
frameworks which will be used by NHS customers
purchasing innovative health IT solutions with
funding provided by central government.
In parallel we have been expanding our UK
presence, invested in enhancing our ANZ
sales capabilities, our product management
and development teams, and establishing
the business leadership and infrastructure
needed to support rapid growth..
CONTINUING EVOLUTION OF
OUR PRODUCT OFFERINGS
Investment in product R&D has focused on
Alcidion’s Miya Precision open standards (FHIR)
based product suite, which is unique in that it
can be used as an alternative approach to the
large integrated Electronic Medical Record (EMR),
or it can complement existing digital health
systems, including EMRs. This year we launched
our fully mobile EMR solution Miya Memory
(formerly MEMRe) and built new remote patient
monitoring capabilities into Miya Precision.
There has been significant investment in
repositioning Alcidion’s product suite to better align
our product offering with how customers want to
implement their digital health strategy. Subsequent
to year end, we have confirmed that Miya Precision
will be the name of our flagship product suite,
consisting of sixteen unique modules that can
be purchased according to customer needs. The
products formerly known as Patientrack and Miya
MEMRe will be repositioned and will be available
as modules of Miya Precision known as Miya
Observations, Miya Assessments and Miya Memory.
SUPPORTING HEALTHCARE PROVIDERS
THROUGH COVID-19
The COVID-19 pandemic has created a challenging
environment globally, due to both economic
pressures and impact on frontline health workers
and hospitals. There was an inevitable refocusing
of priorities and health IT investment as well
as diversion of clinical staff and management
to respond to the clear and immediate threat
posed by the pandemic. Rather than disrupting
our growth strategy, this has reshaped a
number of market opportunities and unlocked
short term funding pools as governments and
hospital operators sought to respond to the
immediate demands created by the pandemic.
Alcidion responded quickly to support our
customers. We built new capabilities into Miya
Precision to support the critical short-term needs
3
For personal use only Our long-term growth strategy has not changed
– we believe in the significant market opportunity
ahead and are committed to completing the
process of scaling up our business to meet the
growing long-term digital needs of healthcare
and to grow our market share. We have the
funding in place to complete this process while
also continuing to seek strategic acquisitions
capable of accelerating our growth plans.
On behalf of Alcidion’s Board of Directors, I wish
to thank our CEO and Managing Director Kate
Quirke, her leadership team, and our valued
shareholders for your support throughout this
past financial year. Alcidion has a clear purpose
– to transform healthcare with smart, intuitive
technology solutions that meet the needs of hospital
and allied healthcare, worldwide. Stay safe, and
we look forward to providing further updates
throughout what should be an exciting FY2021.
Yours faithfully,
Ms Rebecca Wilson
Chair, Alcidion Group Limited
4
of hospitals. In the early stages of the pandemic we
developed a dashboard solution to support vital
signs monitoring of COVID-19 cases, both in hospital
and remotely. These remote patient monitoring
capabilities are used to deliver the highest quality
of care to at-risk and COVID-19 positive patients
at home. Reducing admissions to hospital, our
solution reduces the demand on hospital beds
and thereby lessens infection risk for clinicians
and other patients. We were pleased to have two
customers sign contracts for this solution, including
Murrumbidgee Local Health District and Sydney
Local Health District with several other existing
and potential customers expressing interest.
Despite the current environmental challenges,
it is pleasing to see the strength of our value
proposition increasingly recognised and to
know that we have been able to support our
customers through this uniquely difficult time.
It also makes me proud to see how our Alcidion
team responded to the quickly changing customer
requirements and how they adapted to remote
working.
GROWTH ACHIEVED DESPITE
CHALLENGING END TO FY2020
For the reasons mentioned above, the second half
of FY2020 delivered challenges to revenue growth.
Despite those challenges, we are pleased to report
an overall 10% increase in FY20 revenue of $18.6M
over FY19 ($16.9M). In the UK, the issues caused
by the pandemic compounded the flow on from
the national election and ongoing uncertainties
relating to Brexit making it particularly pleasing
to see a 50% increase in UK revenues to $4.0M.
The EBITDA loss of $3.8m and net loss after
tax of $3.1m was not unexpected and reflects
the investments in our growth strategy
made during FY20 and constrained revenue
growth in the latter part of the year.
OUTLOOK
While we are already seeing many positive initial
impacts from the investments we have made,
substantial revenue growth will take time to build
as our sales resources and marketing campaigns
extend our reach into the market and as we
leverage the positive results evidenced from
early adopters of our new product capabilities.
We need to sustain investments already committed
in FY20 and to invest further in FY21 to complete
the process of scaling the business. We do however
expect to complete this investment phase during
FY21 with the Group cost base stabilising.
While we have not been immune to the impact of
COVID-19, we enter FY2021 confidently, primed for
further growth, with $29.8M of already sold revenue
of which $12.8M is expected to be recognised in
FY21, a strong sales pipeline of future business
and our newly rebranded Miya product suite.
For personal use only A YEAR OF INVESTMENT,
INTEGRATION AND GROWTH
2019
JULY 2019
Alcidion appointed as preferred provider
with Dartford and Gravesham NHS
Trust for Better’s OPENeP medications
management solution.
SEPTEMBER 2019
Three-year agreement signed with Healthscope
to support its data and analytics strategy, our
first implementation of data and analytics
capabilities into a private hospital group.
DECEMBER 2019
Three-year contract signed with our first Global
Digital Exemplar (GDE), Taunton and Somerset
NHS Foundation Trust for Patientrack.
Lynette Ousby appointed GM Sales and
Marketing in the UK as investment in
driving growth in UK market commences.
APRIL 2020
Renewal signed with NHS Fife to extend
Patientrack across the entire Board
for five years.
JUNE 2020
Sydney LHD signs a 12-month contract for
Miya Precision to support virtual care at
rpavirtual, monitoring COVID-19 patients
who are in home isolation.
AUGUST 2019
Alcidion, MKM Health, Patientrack and Oncall
Systems are united under one cohesive
Alcidion brand. New website launched.
NOVEMBER 2019
$16.2M successfully raised to accelerate
Alcidion’s growth strategy and drive adoption
across the UK, Australia and New Zealand.
MARCH 2020
Alcidion showcases Miya Precision in the UK
at the Digital Health Rewired Conference.
Alcidion rolls out COVID-19 monitoring and
assessment solutions for Miya Precision and
Patientrack to support healthcare providers
manage cases, in-hospital and remotely.
APRIL 2020
Murrumbidgee LHD elects to continue using
Miya Precision for an initial 12-month period
following its use as part of eHealth NSW’s
Proof of Concept innovation challenge.
Additional implementation of a COVID-19
dashboard for remote and in-hospital
monitoring. Miya Memory (MEMRe) rolled
out to 200 clinicians. Longer term opportunity
to expand use of Miya Precision.
D
U
A
$
S
N
O
I
L
L
I
M
20
18
16
14
12
10
8
6
4
2
0
12
10
8
6
4
2
0
QUARTERLY SOLD REVENUE - FY19-20
10% GROWTH
FY2019 REVENUE
$16.9M
FY2020 REVENUE
$18.6M
18.6
14.8
15.9
11.1
16.9
17.4
15.4
12.9
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
FY2019
FY2020
RECURRING VS NON-RECURRING REVENUE - FY19-20
8.6
9.1
6.7
7.3
7.5
7.3
7.8
7.8
9.1
7.3
6.3
4.4
5.1
10.1
10.5
8.1
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
FY2019
FY2020
NON - RECURRING
RECURRING
2020
5
For personal use only
Q&A WITH MANAGING DIRECTOR
KATE QUIRKE
Q: WHAT ACHIEVEMENTS ARE YOU
MOST PROUD OF IN FY2020?
I am very proud of the manner in which Alcidion
has come together as one cohesive company,
unifying our operations across three markets.
Although the integration of the MKM Health and
Patientrack businesses commenced in FY2019, it
has really been during FY2020 that the real value
and potential of the new Alcidion has been evident.
The combination of our strong product offerings
and the technical, commercial and implementation
skills of the team have enabled us to create a
highly differentiated offering in digital health.
Building on this solid foundation, we have
commenced implementing our growth strategy,
investing in scaling up the business so we can
capitalise on the escalating opportunities in digital
enabled healthcare. I was pleased with the strong
level of support for our capital raise which was
completed in late 2019 to fund this strategy.
We have moved quickly to put these funds to
use. In the UK, we followed the appointment of
Lynette Ousby as UK GM with a restructuring
and expansion of our sales team, ensuring we
now have the resources required to successfully
grow our market share across the National
Health Service (NHS). We signed a number of
new contracts and renewals in this market.
We have a brand that is trusted and a strong
heritage in the UK market thanks to the dominant
position of our Patientrack solution which continues
to attract new NHS trust customers each year.
This year, our ongoing work with NHS trusts that
are pioneering the shift to digital healthcare along
with our swift response to COVID-19 – working
in partnership with our customers – has further
confirmed our positioning as an important
partner for customers as they push forward with
adoption of digitally enabled models of care.
In the Australian market, I am very proud of the
work we’ve done with Murrumbidgee Local Health
District. This work began with rolling out Miya
Precision at Wagga Wagga Base Hospital as part
of eHealth NSW’s Proof of Concept innovation
challenge. It was here that Miya Memory (MEMRe)
went live for the first time and it has received
much praise for its ability to deliver meaningful
notifications, alerts and test results direct to
doctors’ handheld devices. Murrumbidgee LHD
has since signed an initial 12-month contract,
including a dashboard implemented to support
COVID-19 monitoring, as well as Miya Memory
being rolled out to 200 clinicians. This shows that
we are working at the forefront of a changing
healthcare industry, evolving our product offerings
in close partnership with our customers to meet
critical clinic needs that are not being satisfied by
big EMRs or other available clinical software.
Building on work done in the eHealth NSW Proof
of Concept, we have also been able to partner
with Sydney LHD to meet an immediate need they
had to enhance their rpavirtual hospital so that it
could meet the challenge of effectively monitoring
COVID-19 patients. As well as welcoming Sydney
LHD as a new customer it has been great to work
with them to understand how the broader Miya
product set could assist Sydney LHD achieve its
broader strategy to utilise technology to implement
new models of care and drive improved patient
outcomes. Our work with these NSW Local Health
Districts, one a rural LHD and the other being
Q: CAN YOU DESCRIBE THE SALES
PROCESS IN EACH MARKET?
The sales process in all markets begins in much
the same way, with identifying which healthcare
providers are planning to invest in new digital
healthcare solutions over the next year or two.
What follows is often six to twelve months of sales
interactions during which we seek to understand
how our solutions can be best positioned to satisfy
the customer’s needs. Our solutions are used by
frontline staff across the organisation – doctors,
nurses, managers, allied health professionals – and
this is who we engage with initially. No matter what
geography we are selling in, it’s important for us
to have the hearts and minds of the people who
will use our system and for them to recognise the
benefits it can deliver. After we have secured the
support of frontline staff, we then engage with
the customer’s technical teams to understand
their data streams and what current systems are
in use. With support from frontline and technical
support staff, we also engage with hospital
management to support the development of the
business case that will be required internally within
the customer to secure the required investment.
The end of this initial sales phase is when we are
invited to formally propose our solution to the
customer through a procurement process.
one of the largest metropolitan LHDs, will enable
us to more effectively position our solutions
for adoption more broadly across NSW.
Finally, I am also proud of how the Alcidion team
has seamlessly transitioned to remote working
across the world in response to the COVID-19
pandemic and how we are finding different ways
to connect with our customers, partners and
prospects in this new operating environment.
Q: HOW DOES ALCIDION’S
PLATFORM DELIVER EFFICIENCIES
FOR HOSPITALS?
Whilst there is a global trend toward electronic
medical records (EMRs), these are not designed
to support the workflows and decision-
making processes of a busy clinician.
Our unique Miya Precision platform is designed
to bring together patient related data from all
systems, including EMRs, delivering real-time
information to identify risks, support decision-
making and manage notifications directly to
clinicians, in a format that is easy to interpret.
Our solution applies artificial intelligence (AI) and
clinical decision support (CDS) algorithms to real-
time events to present filtered actionable patient
data relevant to clinical workflows, delivering
substantial productivity improvements.
With Miya Flow, ward staff can better manage
the patient journey, ensuring precious hospital
resources are efficiently used and reducing average
length of stay. Our Patientrack bedside monitoring
solution also reduces the time patients can spend
in hospital, quickly alerting clinicans to deteriorating
patients, so they can intervene earlier, thereby
avoiding prolonged hospital stays and demand
on ICU beds that results from a delayed response.
6
For personal use only
Q: WHAT IS THE TOTAL ADDRESSABLE
MARKET FOR EACH GEOGRAPHY?
The UK is our largest addressable market and
presents us with a strategically important
opportunity. They are an adopter of best of breed
and hybrid solutions to a larger extent than
Australia which has tended to implement large
scale EMRs. In this market we have a substantial
existing Patientrack customer-base which presents
cross-selling opportunities. Over the past year, we
have seen government funding committed to the
NHS to achieve digital maturity. The market size for
all Alcidion products and services is $1.1 billion.
In Australia, our total addressable market is
$450 million. Our value proposition in this
market is offering Miya Precision as a platform
to draw data from disparate IT systems or
large EMRs and turn this data into powerful
insights supporting clinical decision making.
In New Zealand, our addressable market is
$75 million. We have a strong market penetration
with Patientrack in both North and South
Islands. We also have an important reference
site at MidCentral District Health Board, where
Miya Access, Miya Command and Miya Flow are
implemented. Smartpage is also implemented
in a number of District Health Boards.
Q: HOW HAS COVID-19 CHANGED
THE OPERATING ENVIRONMENT
FOR ALCIDION?
The COVID-19 pandemic has created significant
challenges for healthcare organisations, as
providers around the globe have been forced at
short notice to adopt new measures as quickly
as possible to deal with the impact of the virus.
As a result of this, we did see some delays
in contract signings in the final quarter as
our customer’s short-term focus shifted and
all available staff were re-deployed to direct
patient care. However, the pipeline has still
grown during this time as our news sales
team came on board and created new ways
to connect with potential customers.
In Australia, procurement in the public sector
– which is our largest market – predominantly
focuses around responding to requests for tender.
This is followed by evaluation of the solutions
and then contract negotiation. In the UK market,
procurement also involves a tender process, but
it is typically conducted through what are known
as framework agreements. In this model a central
government agency (e.g. on behalf of the NHS)
appoints qualified suppliers to a specific framework
to supply designated types of goods and services
for a certain period of time under fixed contractual
terms and conditions. NHS trusts are then able
purchase approved offers from these frameworks
via a contracted mini-tender process which takes
significantly less time to progress through to
selecting a supplier and placing an order. Being
appointed to appropriate procurement frameworks
is therefore one of our priorities in the UK market.
In all markets the public sector procurement
process could be considered to be lengthy
but they are generally seeking contracts that
whilst initially may be 3-5 years, they are of a
significant size and can span 10-20 years of use.
Q: HOW DO YOU RECOGNISE
REVENUE FROM YOUR SOFTWARE
AND SERVICES?
Generally, our product contracts are structured
in two ways. The first approach is a subscription
based model. In these contracts we roll up licensing,
support and hosting into a monthly or quarterly
charge. These contracts typically span three to
five years, with revenue recognised on a monthly
basis. The other approach is based on selling a
product license for up to five years, with the value
of the software license recognised upfront, with
associated support and maintenance and any
hosting revenues recognised over the life of the
contract as the service is delivered to the customer.
Under this model the support and maintenance and
any hosting revenue is considered recurring but the
licence fee is categorised as non-recurring revenue.
Services revenue can be related to the
implementation of our products or for
other technical services provided to a
customer through our data and analytics
or integration services stream.
Where the services contract exceeds 12 months, it
is considered recurring revenue if it relates to an
ongoing service that is delivered for an annual fee
otherwise, it is considered non-recurring revenue.
our product offering by consolidating our products
under the Miya Precision banner. This approach is
a natural progression and will greatly help us not
only communicate our value proposition to potential
customers but for the customer it also makes adding
Miya Precision modules easier and more compelling.
We also expect to be able to leverage the work we
have been doing in partnering with customers to
better equip them to meet the ongoing challenges
presented by COVID-19. Improved models of virtual
care will not only deliver immediate benefits in
dealing with the pandemic but will also position
our customers with strategic new capabilities
that deliver ongoing benefits post pandemic in
the care of patients with chronic conditions.
We are favourably positioned for further
growth going into FY2021. In all markets
we now have a Miya Precision customer
reference site, as well as a strong pipeline of
opportunities and a greatly enhanced sales
team. I am looking forward to updating the
market throughout the coming financial year
as our solutions continue to support healthcare
transformation and further growth is achieved.
Ms Kate Quirke
Managing Director, Alcidion Group Limited
New opportunities have also arisen due to
recognition of our solutions’ value in supporting
COVID-19 management. Alcidion moved quickly to
build new capabilities into our solutions to support
our customer base to assess and monitor COVID-19
cases. One of these solutions is a monitoring
dashboard for Miya Precision, which allows clinical
staff to monitor the vital signs of COVID-19 positive
patients who are either in hospital or isolating
remotely. We are pleased to report the solution is
being used at Murrumbidgee Local Health District
for both in and out of hospital monitoring, as well
as at rpavirtual in Sydney for remote monitoring.
Q: YOU HAVE MENTIONED AN
INTEREST IN ACQUISITIONS
AFTER THE CAPITAL RAISE.
IS THIS STILL A PRIORITY?
Alcidion has demonstrated we can acquire
businesses and successfully integrate them,
delivering value to our customers and shareholders.
As such, we remain interested in businesses
that align strategically with our purpose and will
expand our capabilities and market share in a
way that increases value. Since the capital raising
in late 2019 we have been actively searching for
and assessing potentially suitable acquisition
opportunities and we will continue to do so
with an emphasis on acquiring quality products
and customers that could enhance our overall
customer proposition and marketing positioning.
Q: WHAT ARE YOU LOOKING FORWARD
TO IN FY2021?
I am really looking forward to seeing us drive further
uptake of our complete product suite across all
markets, particularly in the UK. We already have
an important reference site for this in Dartford
and Gravesham NHS Foundation Trust, but what’s
also important is that we have now repositioned
7
For personal use only MURRUMBIDGEE
LOCAL HEALTH
DISTRICT & ALCIDION’S
MIYA PRECISION
Providing clinicians with
real-time data to enhance
clinical decision-making
OUR CLIENT
Murrumbidgee Local Health District (MLHD)
provides a range of public health services
to the Riverina and Murray regions of
New South Wales, Australia.
Patient safety and the reduction of preventable
harm to patients is at the heart of MLHD.
They initiated an “Our People, Our Future”
excellence strategy to support bottom-up
quality improvement that results in safer,
harm-free care at all facilities across the region.
THE CHALLENGE
MLHD partnered with Alcidion to mobilise data
to improve safety and quality of care. It started
with a project in the Emergency Department (ED)
of MLHD’s Wagga Wagga Base Hospital.
“We want to give clinicians
fast access to meaningful data
insights which helps them
to identify patients at risk of
deterioration and provide
more timely mobile access to
pathology results and X-rays.”
Dr Stephen Wood
Director Emergency Department
“The clinicians quickly realised
the opportunities Miya provided,
and how it could support
their workflows. They became
advocates for the system and
asked for more notifications.
The app was adopted very quickly.”
Thomas Glanville
Director Digital Transformation
MLHD wanted to explore how critical test results
could be shared securely in real-time via mobile
devices to enhance clinical decision-making.
They felt could assist the diagnosis and
treatment of patients in ED.
Core to the project was access to real-time
data from the Electronic Medical Record (EMR)
and converting it to the Fast Healthcare
Interoperability Resource (FHIR) standard.
THE SOLUTION
Alcidion worked with ten ED clinicians to configure
Miya Memory, a mobile EMR providing access
to patient records, critical test results and risk
indicators in real-time.
Miya Memory exploits the vast amount of clinical
information available and distils it to an intuitive
user interface aligned to clinical workflows.
When the COVID-19 pandemic started, MLHD
decided to leverage capabilities of Alcidion’s Miya
Precision to monitor COVID-19 positive and at-risk
patients, in-hospital and remotely.
Miya Precision integrates data from devices
to monitor patients and display risk based
on relevant criteria. Through this monitoring
dashboard, clinicians have heightened visibility
of patients, regardless of their location.
THE RESULT
The project was a resounding success and Miya
Memory has been rolled out to 60+ clinicians
across Wagga Wagga Base Hospital.
The ability to monitor and be alerted to patient
safety impacts in real-time has provided clinicians
with decision support that positively impacts care
and improves patient safety.
“Clinicians found it useful to have
data available on their mobile
phones and want more. They
used it to share with patients,
improving their engagement
in managing their health.”
Thomas Glanville
Director Digital Transformation
“By extracting EMR data and
converting it to FHIR, there
is opportunity to introduce
more innovation using Natural
Language Processing which we
believe can deliver a positive ROI
from improved episode coding.”
“We are also looking at supporting
consumers to access to their own
care planning in community.”
Thomas Glanville
Director Digital Transformation
Miya Precision is supporting management of patients
who prefer to be treated at home rather than in
hospital. MLHD was treating an 80 year-old Woman
who had suffered a heart attack. She had become
unwell but did not want to be admitted again.
Her daughter said, “When mum was in hospital with
the COVID restrictions, family couldn’t visit. We were
allowed one person, one hour per day only. It was
very hard for all the family.”
Respecting her wishes, the doctor admitted her
to Hospital in the Home (HITH) with a monitoring
armband. Some hours later, the virtual care staff
detected a decreased respiratory rate on Miya
Precision. The doctor had a video call with her and
arranged a home visit, adjusted her medication and
continued with home monitoring. The patient and
her family were much happier with this solution and
impressed with the remote monitoring.
THE FUTURE
MLHD is looking to expand the use of Miya Precision
to other Hospital teams and aiming to adapt it for
other clinical workflows.
8
For personal use only
FINANCIAL
RESULTS FY2020
For personal use only ANNUAL REPORT – DIRECTOR’S REPORT
FOR YEAR ENDED 30 JUNE 2020
DIRECTORS’ REPORT
The directors of Alcidion Group Limited (“Alcidion” or the “Group” or, the “Company”) submit herewith the annual
financial report of the Group for the year ended 30 June 2020 (Report).
DIRECTORS
The names and particulars of the directors of the Company in office during the year and until the date of this report are
as follows.
Directors were in office for the entire year unless otherwise stated.
MS REBECCA WILSON
CHAIR (FROM 30 AUGUST 2019)
Appointed 1 August 2017
B.A (Journalism), Post Grad Applied
Finance and Investment (FINSIA)
MS KATE QUIRKE
MANAGING DIRECTOR
Appointed 3 July 2018
B. Applied Science
PROF MALCOLM PRADHAN
EXECUTIVE DIRECTOR & CHIEF
MEDICAL OFFICER
Appointed 22 February 2016
MBBS, PhD, FACHI
advice
science
Rebecca has more
than 20 years’
experience working within the healthcare,
sectors
life
technology and
providing
stakeholder
communications,
issues management,
investor and corporate relations, and
business strategy to private and public
companies, corporations, governments,
and asset managers.
on
and
relations
She advises boards and executive teams on
commercial
investor
strategies and has strong experience in
transactions, including more than 60 IPOs,
M&A transactions, and hundreds of capital
raisings.
&
Australia
is Executive Vice President
Rebecca
Singapore
for WE
Communications, Executive Director of
consulting firm WE Buchan, and Advisory
Board member of Gillian Fox Leadership.
She is a member of the Australian Institute
of Company Directors (AICD).
Kate has more than 25 years of experience
in the healthcare information technology
sector.
She has been involved in large systems
procurements and
implementations of
healthcare information technology across
Australia, New Zealand and South East
Asia.
Kate’s background involves holding leading
management roles at some of the largest
healthcare software firms where she has
had an
impact on strategic product
direction across the health sector and
believes astute application of information
the
technology
transformation of healthcare delivery
worldwide.
support
will
As Alcidion Managing Director, Kate leads
the various elements of the business
across Australia, New Zealand and the
United Kingdom with a focus on sales and
marketing
and developing business
relationships with customers, partners and
investors across the world.
With over 25 years of experience
in
Medical Informatics, Malcolm is one of the
world’s leading minds in Clinical Decision
Support and Health Informatics. Malcolm
holds a medical degree from the University
of Adelaide and a PhD
in Medical
Informatics from Stanford University. Prior
to co-founding Alcidion in 2000, Malcolm
was as a
the
Australasian College of Health Informatics
(ACHI).
fellow of
founding
Throughout his career, Malcolm has been
a strong advocate for interoperability, and
a sustainable health care system using
smart data-driven IT systems that improve
patient safety, reduce clinician workloads
and support new models of care.
In his time at Alcidion, Malcolm has
overseen and driven the development and
design of Alcidion’s products, including the
Miya Precision Platform, a
system
designed to run algorithms safely and at
scale
improve
healthcare delivery by using real-time
analytics and AI.
so organisations can
10
For personal use only
ANNUAL REPORT – DIRECTOR’S REPORT
FOR YEAR ENDED 30 JUNE 2020
MR SIMON CHAMBERLAIN
NON-EXECUTIVE DIRECTOR
Appointed 1 July 2019
B.Com (Accounting), LLB (Hons)
GAICD
Simon is an accomplished executive and
business leader, with more than 20 years’
experience at
including
Medibank Private, Qantas Airways,
Australian Unity and Experian.
companies
Simon has a proven track record for
strategic success and commercial growth
across a range of industries and markets.
Simon led Qantas’ entrance into the
online hotels business, establishing a
profitable, high growth new division. At
Medibank, Simon had
responsibility
across all customer channels and the
the
enterprise’s data and oversaw
creation of
its customer experience
practice.
Gaining a better understanding of the
complex challenges facing the wider
health system led to Simon’s role leading
strategy
for MedAdvisor, where he
supported the domestic growth and
global expansion of its health technology
business.
valuable
international perspective and global
network to the Alcidion Board, holding
executive roles across the US and the UK,
where he was a key part of the executive
team that sold the Australian start-up,
Hitwise, to Experian in 2007.
Simon
brings
Simon holds a Bachelor of Commerce
from
(Accounting) and Law
Monash University.
(Hons)
11
MR RAYMOND BLIGHT
NON-EXECUTIVE DIRECTOR
(Chairman until 30 August 2019)
Appointed 22 February 2016
B Tech, B EC, MBM, FIE (AUST),
FAICD
MR NICK DIGNAM
NON-EXECUTIVE DIRECTOR
Appointed 22 February 2016
B.Com, LLB, MAppFin
Ray is the co-founder and Non-Executive
Director (Chairman until August 2020) of
Alcidion Group. He brings a wealth of
public and private sector healthcare
experience and knowledge to Alcidion
including the role of the Chief Executive
and Chairman of the South Australian
Health Commission from 1994 – 1998 and
Chair of the Australian Health Ministers’
budget
Advisory
responsibility during his tenure as CEO
Health Commission was US$1 billion per
annum.
Council.
Ray’s
Ray brings a rare combination of creative
and innovative thinking to Alcidion, along
with pragmatism and problem-solving
health management skills and expertise.
Ray is passionate about the opportunities
for health
informatics technology to
transform safety, quality and timeliness
of health care service delivery and is
committed
delivering
intelligent software system innovations
that work effectively and efficiently and
benefit all levels of health care service
from patients through to providers and
budget holders.
Alcidion
to
Ray is currently the Chair of the Northern
Adelaide Local Health Network, the State
health services provider to a population
of over 400,000 and is Deputy Chairman
of the MedTEC Pharma Advisory Board.
for
firm. He
Nick Dignam is a Partner of Fortitude
Investment Partners, a growth capital
is
focused private equity
responsible
new
investment opportunities, working with
portfolio companies to deliver growth
and managing exit processes. Nick has
more than ten years’ experience working
in private equity.
originating
In addition to serving as a non-executive
Director of Alcidion, Nick also serves as a
director on the Board of a number of
Fortitude’s portfolio companies including
Better Medical, Birch & Waite, Sunfresh
Salads, Wild Breads and GM Hotels. Nick
has previously served on the Boards of
(outsourced hospital pharmacy
HPS
(software
Readify
services)
development services).
and
Prior to establishing Fortitude, Nick was
the Head of Growth Capital in Blue Sky’s
Private Equity division, and prior to this he
was an investment director with mid-
market private equity
firm Catalyst
Investment Managers. Before Catalyst
Nick spent three years with Ernst & Young
in the corporate finance division.
Nick holds a Bachelor of Commerce and a
Bachelor of Laws from the University of
Queensland, and a Masters of Applied
Finance from Queensland University of
Technology.
For personal use only
ANNUAL REPORT – DIRECTOR’S REPORT
FOR YEAR ENDED 30 JUNE 2020
COMPANY SECRETARY
Ms Melanie Leydin was appointed Company Secretary on 4 March 2019. Ms Leydin graduated from Swinburne University in 1997,
became a Chartered Accountant in 1999 and since February 2000 has been the principal of chartered accounting firm, Leydin Freyer.
Ms Leydin has over 25 years’ experience in the accounting profession and has extensive experience in relation to public company
responsibilities, including ASX and ASIC compliance, control and implementation of corporate governance, statutory financial
reporting, reorganisation of Companies and shareholder relations and is a director and company secretary for a number of entities
listed on the Australian Securities Exchange.
SHARES AND OPTIONS HELD BY DIRECTORS
Director
Current
holding
Net increase/
(decrease)
Current
holding
Net increase/
(decrease)
Ordinary Shares
Options over Ordinary Shares
Rebecca Wilson (NE Chair) (i)
1,480,000
400,000
Kate Quirke (MD)
56,542,557
15,400,746
Malcolm Pradhan (ED)
134,582,403
-
Raymond Blight (NED) (ii)
100,578,081
(686,040)
Nicholas Dignam (NED)
Simon Chamberlain (NED) (iii)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(i)
(ii)
(iii)
Ms Wilson was appointed Non-Executive Chair on 30 August 2019.
Mr Blight was Executive Chair until 25 January 2019 when his position changed to Non-Executive Director. On 30 August
2019 Mr Blight stood down from the role of Chair but continued as Non-Executive Director.
Mr Chamberlain was appointed Non-Executive Director on 1 July 2019.
As at the date of this report, no share options had been granted to directors as part of their remuneration by
Alcidion Group Limited.
12
For personal use only
ANNUAL REPORT – REMUNERATION REPORT
FOR YEAR ENDED 30 JUNE 2020
REMUNERATION REPORT (AUDITED)
The remuneration report is set out under the following main headings:
A. Principles used to determine the nature and amount of remuneration
B. Details of remuneration
C. Share-based compensation
D. Director equity holdings
E. Director & KMP service agreements
The information provided in this remuneration report has been audited as required by section 308(3C) of the
Corporations Act 2001.
A. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
The Remuneration Committee consists of three non-executive directors. The remuneration policy has been designed to
align director and executive objectives with shareholder and business objectives by providing a fixed remuneration
component and short-term incentives based on the Group’s financial results and achievement of individual performance
targets aligned with the Company’s strategic goals. The Board believes the remuneration policy to be appropriate and
effective in its ability to attract and retain the best directors and executives to manage the Group.
The Board’s policy for determining the nature and amount of remuneration for Board members and senior executives is
as follows:
The remuneration policy, setting the terms and conditions for the remuneration of executive directors and other
senior executives, is reviewed annually as appropriate, to reflect changing remuneration practices and the growing
size of the Company. All executives receive a base salary (which is based on the market rate for the role in similar
sized listed companies and the experience of the individual), superannuation and short-term incentives in the form
of annual performance-based bonuses.
The Board may exercise its discretion in approving both salaries and short-term incentives to ensure they are designed
to attract and appropriately incentivise the highest calibre of executives and reward them based on the achievement
of financial results and strategic objectives that will drive long-term growth in shareholder wealth and the realisation
of other strategic Company goals such as being an employer of choice and a good corporate citizen.
The Board has the discretion to offer long-term incentives (LTIs) in the form of performance rights or options to
executive directors and other senior executives, with a view to improving the retention of key executives. No LTIs were
granted in FY2020 however the Company does plan to implement a FY2021 LTI Program for executive directors, other
senior executives and senior staff.
The executive directors receive a superannuation contribution of either 9.5% or 10% of base salary up to the maximum
permitted concessionary contribution ($25,000) and do not receive any other retirement benefits.
All remuneration paid to directors and executives is valued at the cost to the Company and expensed.
The Board policy is to remunerate non-executive directors at market rates for comparable listed companies for time,
commitment and responsibilities. The Board determines payments to the non-executive directors and reviews the
remuneration annually, based on market practice, duties and accountability. Independent external advice is sought
when required. Fees for non-executive directors are not linked to the performance of the Company.
B. DETAILS OF REMUNERATION
Details of remuneration of the directors and key management personnel (as defined in AASB 124 Related Party
Disclosures) of Alcidion Group Limited are set out in the following table.
The Company does not have any other employees who are required to have their remuneration disclosed in accordance
with the Corporations Act 2001.
13
For personal use only
ANNUAL REPORT – REMUNERATION REPORT
FOR YEAR ENDED 30 JUNE 2020
The table below shows the 2020 and 2019 figures for remuneration received by the Company’s directors and executives:
Short Term
Post-employment
Share-based Payments
Equity settled
Total
Salary &
Fees
$
Bonus
$
Annual
Leave
$
Superannuation
$
Prescribed
benefits
$
Shares
$
Share Options
Exercised
2020 Directors
Rebecca Wilson (i)
Kate Quirke (ii)
72,298
318,370
-
82,500
-
29,361
Malcolm Pradhan (iii)
249,385
5,625
20,615
Raymond Blight (iv)
Nicholas Dignam (v)
Simon Chamberlain (vi)
182,328
48,750
61,250
-
-
-
-
-
-
Executives
6,868
25,002
25,076
-
-
-
Colin MacKinnon (viii)
252,900
67,500
17,100
2020 Total
1,185,281 155,625
67,076
25,002
81,948
2019 Directors
Rebecca Wilson (i)
Kate Quirke (ii)
53,273
-
249,820
120,000
Malcolm Pradhan (iii)
226,616
13,125
Raymond Blight (iv)
203,146
Nicholas Dignam (v)
Simon Chamberlain (vi)
-
-
Geoff Rohrsheim (vii)
50,000
Executives
-
-
-
-
-
34,180
33,384
17,354
-
-
-
5,061
25,000
25,000
22,050
-
-
-
Colin MacKinnon (viii)
240,789
90,000
Duncan Craig (ix)
197,403
-
20,211
35,697
25,000
15,900
2019 Total
1,221,047
223,125
140,826
118,011
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
79,167
455,233
300,700
182,328
48,750
61,250
362,502
1,489,930
58,334
429,000
298,125
242,550
-
-
50,000
376,000
249,000
1,703,009
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
Ms Wilson was appointed Non-Executive Director on 1 August 2017 and Chair on 30 August 2019.
Ms Quirke was appointed as Executive Director / CEO on 3 July 2018 and the Managing Director on 25 January 2019.
Mr Pradhan was appointed as Executive Director on 22 February 2016.
Mr Blight was appointed Executive Chair on 22 February 2016. On 25 January 2019 his position as Chair changed from
Executive to Non-Executive. On 30 August 2019 Mr Blight stood down from the role of Chair but continues as a Non-
Executive Director.
Mr Dignam was appointed as a Non-Executive Director on 22 February 2016. The Board and Mr Dignam agreed that no
fees were to be paid to Mr Dignam from his appointment to 30 September 2019. Fees were paid from 1 October 2019.
Mr Chamberlain was appointed Non-Executive Director on 1 July 2019.
Mr Rohrsheim served as Non-Executive Director until he resigned on 30 June 2019.
Mr MacKinnon assumed the roles of COO and CFO from 1 March 2019.
Mr Duncan Craig resigned as CFO / Company Secretary on 28 February 2019.
Refer to page 16 for details of remuneration of all current directors and other key management personnel as at the date of this report.
C. SHARE-BASED COMPENSATION
Performance rights and options can be issued to directors and executives as part of their remuneration. There were no
performance rights or options granted in FY2020.
14
For personal use only
ANNUAL REPORT – REMUNERATION REPORT
FOR YEAR ENDED 30 JUNE 2020
D. DIRECTORS’ EQUITY HOLDINGS
Fully paid ordinary shares of Alcidion Group Limited:
2020 Directors
Rebecca Wilson
Kate Quirke (i)
Raymond Blight (ii)
Malcolm Pradhan
Nicholas Dignam
Geoff Rohrsheim
Simon Chamberlain
Executives
Colin MacKinnon (iii)
2019 Directors
Rebecca Wilson
Kate Quirke (i)
Raymond Blight (ii)
Malcolm Pradhan
Nicholas Dignam
Geoff Rohrsheim
Executives
Colin MacKinnon (iii)
Duncan Craig
Balance at
1 July
Share Options
exercised
Net other
change
(Sale)/Purchase
At date of
resignation
Balance at
30 June
No.
No.
No.
No.
No.
1,080,000
9,561,557
101,264,121
134,582,403
-
1,000,000
-
5,697,595
253,185,676
970,000
2,100,000
100,264,121
134,582,403
-
1,000,000
130,000
3,873,101
242,919,625
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
400,000
46,981,000
(686,040)
-
-
-
-
-
-
-
(1,000,000)
-
1,480,000
56,542,557
100,578,081
134,582,403
-
-
64,865,420
-
70,563,015
111,560,380
(1,000,000)
363,746,056
110,000
7,461,557
1,000,000
-
-
-
5,567,595
-
-
-
3,873,101
1,080,000
9,561,557
101,264,121
134,582,403
-
1,000,000
5,697,595
-
14,139,152
3,873,101
253,185,676
(i)
(ii)
(iii)
The shares held by Ms Quirke as at 30 June include shares held in her own name (K Doyle) and in her superannuation
fund. Related parties to Ms Quirke held a further 100,001 shares as at 30 June 2019. Ms Quirke also had an interest in
a further 31,580,254 shares held in escrow in her name and the name of a related party which were released on 3 July
2019.
A related party to Mr Blight held a further 5,235,340 shares as at 30 June 2020 (and also as at 30 June 2019).
The shares held by Mr MacKinnon as at 30 June include shares held in the name of his family trust and his superannuation
fund. As at 30 June 2020, Mr MacKinnon also had an interest in a further 45,422,078 shares in the name of his family
trust and a related party which were released on 3 July 2019.
15
For personal use only
ANNUAL REPORT – REMUNERATION REPORT
FOR YEAR ENDED 30 JUNE 2020
E. DIRECTOR & KMP SERVICE AGREEMENTS
Director and KMP service agreements as at the date of this report are summarised below.
During FY2020, Director Rebecca Wilson was employed initially as a Non-Executive Director and then as Non-Executive
Chair on following key terms:
a) Salary of A$85,000 per annum inclusive of superannuation.
During FY2020, Director Raymond Blight was employed as a consultant as well as initially Non-Executive Chairman and
then Non-Executive Director from when Rebecca Wilson was appointed Chair, on following key terms:
a) Annual fee of A$184,920 plus permitted expenses; and
b) 6-month notice period.
Managing Director Kate Quirke was employed from 3 July 2018 as an Executive Director & Chief Executive Officer on
terms that were updated effective 1 January 2020 to:
a) Base salary of A$413,461 gross inclusive of statutory superannuation, any allowances and salary sacrifices;
b) Annual performance-based cash bonus (STI) up to $96,000 on achieving on-budget revenue and other personal
performance targets with up to an additional $64,000 on achieving stretch targets;
c) Eligible to participate in the Long-Term Incentive Plan (LTIP) with the issue of performance rights or options
(subject to shareholder approval) up to the value of 100% pf base salary, vesting after 3 years. Terms and hurdles
of the LTIP are to be determined in Q1 FY2021; and
d) 6-month notice period.
Executive Director Malcolm Pradhan was employed during FY2020 as an Executive Director & Chief Medical Officer on
following key terms:
a) Base salary of A$270,000 per annum plus $25,000 superannuation contribution;
b) Annual performance-based cash bonus (STI) up to $33,000 on achieving on-budget revenue and other personal
performance targets with up to an additional $30,000 on achieving stretch targets; and
c) 6-month notice period.
Non-Executive Director Nick Dignam was appointed on 22 February 2016. From 1 October 2019 he was employed on the
following key terms:
a) Director fee of A$65,000 per annum.
Non-Executive Director Simon Chamberlain was appointed on 1 July 2019 on following key terms:
a) Director fee of A$65,000 per annum.
Executive Colin MacKinnon was employed from 3 July 2018 as Group Commercial Manager and then from 1 March 2019
as Chief Operations Officer and Chief Financial Officer on following key terms:
a) Base salary of A$270,000 per annum plus $25,000 superannuation contribution;
b) Annual performance-based cash bonus (STI) up to $55,000 on achieving on-budget revenue and other personal
performance targets with up to an additional $50,000 on achieving stretch targets; and
c) 1-month notice period
- - END OF REMUNERATION REPORT - -
16
For personal use only
ANNUAL REPORT – DIRECTOR’S REPORT (CONTINUED)
FOR YEAR ENDED 30 JUNE 2020
DIRECTORS’ REPORT (CONTINUED)
DIRECTORS’ MEETINGS
The following table sets out information in relation to Board and Committee meetings held during the year:
Board Member
Board Meetings
Audit and Risk
Committee
Nomination and
Remuneration
Committee
Rebecca Wilson
Kate Quirke
Raymond Blight
Malcolm Pradhan
Nicholas Dignam
Simon Chamberlain
Eligible to
Attend
Attended
Eligible to
Attend
Attended
Eligible to
Attend
Attended
13
13
13
13
13
13
13
13
9
11
12
13
2
-
2
-
4
4
2
-
2
-
4
4
4
-
-
-
4
4
4
-
-
-
4
4
PRINCIPAL ACTIVITIES
The principal activities of Alcidion include the development and licensing of its own healthcare software products (Miya,
Patientrack and Smartpage), the reselling of selected healthcare software products from its strategic partners and the
delivery of product implementation, product support and maintenance, systems integration and data analysis services to
healthcare customers in Australia, New Zealand and the UK.
OVERVIEW OF ALCIDION AND ITS BUSINESS
Alcidion has a simple purpose: to transform healthcare with smart, intuitive technology solutions that meet the needs of
hospital and allied healthcare, worldwide. It offers a complementary set of software products and services that create a
unique offering in the global healthcare market; solutions that support interoperability, improved team collaboration and
task management, and deliver clinical decision support at the point of care to improve patient outcomes.
In February 2018 Alcidion acquired Oncall Systems and its Smartpage clinical communications system. In July 2018 it
acquired the Patientrack bedside monitoring software and MKM Health, an IT solutions and services provider. These
offerings now operate under the Alcidion brand in Australia, New Zealand and the UK. With over 25 years of healthcare
experience, Alcidion brings together the very best in technology and market knowledge to deliver solution that make
healthcare better for everyone.
FINANCIAL REVIEW
Operating Results
1. Alcidion Group Limited (the Group) FY2020 revenue was $18,608,279 (2019: $16,864,323)
2. The FY2020 loss before tax was $4,018,157 (2019: loss before tax of $109,926).
3. Net Cash at Bank at the end of the year was $15,947,957 with minimal debt.
17
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ANNUAL REPORT – DIRECTOR’S REPORT (CONTINUED)
FOR YEAR ENDED 30 JUNE 2020
Financial Position
The Group has incurred a net loss after tax for the year ended 30 June 2020 of $3,076,596 (2019: $84,165 loss), and a
net cash outflow from operating activities of $2,629,967 (2019: inflow of $1,990,959) contributing to an overall
improvement in year-end cash balance, after cash flows associated with investing and financing, to $15,947,957 (2019:
3,171,843). At 30 June 2020, the Group has current assets of $20,225,854 (2019: $6,871,779) and net equity of
$29,737,161 (2019: $13,242,586).
Summary of Financial Information as at 30 June 2020
Cash and cash equivalents ($)
Net assets/equity
Revenue
EBITDA
Group 2020
Group 2019
Group 2018
15,947,957
3,171,843
2,890,339
29,737,161
13,242,586
3,333,246
18,608,279
16,864,323
4,179,487
(3,770,782)
(39,315)
(2,087,125)
Loss from ordinary activities after income tax expenses ($)
(3,076,596)
(84,165)
(2,089,313)
No of issued shares
Basic earnings per share (cents)
Diluted earnings per share (cents)
Share price ($)
990,694,052
805,671,138
607,779,957
(0.31)
(0.31)
0.145
(0.01)
(0.01)
0.125
(0.34)
(0.34)
0.052
Market capitalisation (Undiluted) ($)
143,650,638
100,708,892
31,604,558
Risk Management
The Alcidion risk management processes support our business to manage and effectively mitigate critical risks. The ability
to effectively identify and manage risk is a vital element of business success for all parts of the Alcidion business. Risk
management takes place in many different processes and operations throughout the Group. The Board of Directors is
ultimately responsible for the governance of risk management and the executive management ensures that there is a
common and efficient process in place.
During the year the Audit and Risk Committee regularly reviewed the Risk Register and assessed the need for any changes
to its Risk Management Process, Risk Appetite Statement and Risk Management Policy. Recommended updates were
reported to the Board and mitigation strategies implemented.
Further details on Company Risk is outlined in Note 27 of the Financial Report.
Significant Changes in State of Affairs
Other than those disclosed in this annual report, no significant changes in the state of affairs of the Group occurred during
the financial year.
Significant Events after the Balance Date
No matters or circumstances besides those disclosed below have arisen since the end of the financial year which
significantly affected or may significantly affect the operations of the Group, the results of those operations, or state of
affairs of the Group in future financial years.
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FOR YEAR ENDED 30 JUNE 2020
a)
In July 2020, Alcidion signed:
a.
two contracts with Murrumbidgee Local Health District with a combined value of $686K to continue
using Miya Precision including the MEMRe mobile clinical application until 31 December 2020. Intended
use includes monitoring COVID-19 patients in hospital and remotely;
b. a two year $1.3M extension to its IT support services contract with ACT Health from 1 January 2021;
and
c. a five year $1.52M contract with NHS Lanarkshire in Scotland to deploy Alcidion’s Patientrack product
across the whole health board;
b)
In August 2020, Alcidion was awarded a place on the UK NHSX £3M Clinical Communications Procurement
Framework which will make it quicker and easier for NHS trusts to procure Alcidion’s Smartpage messaging
system without tendering, as part of the NHS’ commitment to replace old paging systems across all NHS trusts.
Likely Developments and Expected Results
During the second half of FY2020, off the back of the successful capital raising in November 2019, Alcidion commenced
investing in scaling the business to generate and support substantial growth across its existing markets in the UK, Australia
and New Zealand and eventually entry to new markets. The COVID-19 pandemic has had some impact on the
achievement of short term growth objectives as health providers have been pre-occupied with measures to address the
pandemic and have also re-prioritised short term investment in health IT to support these measures. Alcidion is however
well-placed to assist health providers in both addressing the immediate consequences of the pandemic and also in
assisting them adopt smarter digital enabled healthcare care delivery that will have an ongoing impact on healthcare
systems as they emerge from the pandemic. Alcidion therefore remains committed to pursuing its growth strategy,
taking advantage of existing and emerging opportunities over the course of FY2021.
Environmental Regulation and Performance
The Groups activities are not subject to any particular and significant environmental regulation under laws of either the
Commonwealth of Australia or a State or Territory of Australia.
We remain committed to acting in a manner that is sensitive to our impact on the environment and that remains
compliant with the environmental policies in each jurisdiction, that our public sector customers require us to comply
with.
Insurance of Directors and Officers
During or since the financial year, the Company has paid premiums insuring all the directors of Alcidion Group Limited
against costs incurred in defending conduct involving:
a) A breach of duty; and
b) A contravention of sections 182 or 183 of the Corporations Act 2001, as permitted by section 199B of the
Corporations Act 2001.
Alcidion has agreed to indemnify all directors and executive officers of the Company against liabilities to another person
(other than the Company or a related body corporate) that may arise from their position as directors of Alcidion, except
where the liability has arisen as a result of a wilful breach of duty in relation to the Company. The agreement stipulates
that Alcidion will meet the full amount of any such liabilities, including costs and expenses. The contract of insurance
prohibits disclosure of the nature of the liability and the amount of the premium.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a
liability incurred as such an officer or auditor.
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ANNUAL REPORT – DIRECTOR’S REPORT (CONTINUED)
FOR YEAR ENDED 30 JUNE 2020
Dividends
No dividends were paid or declared during the financial year and no recommendation for payment of dividends has been
made.
Non-Audit Services
The Board of Directors, in accordance with advice from the Audit and Risk Committee, is satisfied that the provision of
audit and non-audit services during the year is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The Directors are satisfied that any non-audit services provided by the auditors
during the year did not compromise the external auditor’s independence. All services provided by the external auditor
or associates are reviewed and approved by the Audit and Risk Committee and/or the Board to ensure they do not
adversely affect the integrity an objectivity of the auditor.
The fees paid or payable to William Buck and its associates for audit and non-audit services provided during the year
ended 30 June 2020 have been disclosed at Note 9 of this financial report.
Compliance
Corporate Governance Statement
The Board of Directors is responsible for the corporate governance of the Company. The Board guides and monitors the
business affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are
accountable.
The Corporate Governance policies and practices of the Company are reviewed annually in accordance with the standards
required of the Company by the Directors, the ASX, ASIC and other relevant stakeholders, to ensure that the highest
appropriate governance standards are maintained, commensurate with the size and operations of the Company.
The ASX Corporate Governance Council released the fourth edition of its Corporate Governance Principles and
Recommendations on 27 March 2014 to take effect for the first full financial year commencing on or after 1 July 2020.
The Company has early adopted the 4th edition of the Corporate Governance Principles and Recommendations and
complies as far as possible with the spirit and intentions of these Recommendations as appropriate, having regard to the
size of the Company and the nature of its enterprise. The Corporate Governance Statement can be found on the
Company’s web site www.alcidion.com.
Auditor’s independence declaration
The auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is included on page
21.
Signed in accordance with a resolution of the directors made pursuant to s 298(2) of the Corporations Act 2001.
For, and on behalf of, the Board of the Company,
Rebecca Wilson
Non-Executive Chair
Melbourne, Victoria this 27th day of August 2020
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ANNUAL REPORT – AUDITOR’S INDEPENDENCE DECLARATION
FOR YEAR ENDED 30 JUNE 2020
AUDITOR’S INDEPENDENCE DECLARATION
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ANNUAL REPORT – DIRECTOR’S DECLARATION
FOR YEAR ENDED 30 JUNE 2020
DIRECTORS’ DECLARATION
The Directors declare that:
a)
b)
in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts
as and when they become due and payable;
in the Directors’ opinion, the attached financial statements and notes thereto for the year ended 30 June 2020
are in accordance with the Corporations Act 2001, including compliance with the Corporations Regulations 2001,
Australian Accounting Standards and International Financial Reporting Standards as disclosed in Note 2 and
giving a true and fair view of the financial position and performance of the Group for the year ended on that
date;
c)
the Directors have been given the declarations required by s.295A of the Corporations Act 2001 for the year
ended 30 June 2020.
Signed in accordance with a resolution of the Board of Directors made pursuant to s.295(5) of the Corporations Act 2001.
For, and on behalf of, the Board of the Company,
Rebecca Wilson
Non-Executive Chair
Melbourne, Victoria this 27th day of August 2020
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FOR YEAR ENDED 30 JUNE 2020
INDEPENDENT AUDITOR’S REVIEW REPORT
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ANNUAL REPORT – INDEPENDENT AUDITOR’S REVIEW REPORT
FOR YEAR ENDED 30 JUNE 2020
INDEPENDENT AUDITOR’S REVIEW REPORT
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ANNUAL REPORT – INDEPENDENT AUDITOR’S REVIEW REPORT
FOR YEAR ENDED 30 JUNE 2020
INDEPENDENT AUDITOR’S REVIEW REPORT
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ANNUAL REPORT – INDEPENDENT AUDITOR’S REVIEW REPORT
FOR YEAR ENDED 30 JUNE 2020
INDEPENDENT AUDITOR’S REVIEW REPORT
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ANNUAL REPORT – FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
for the year ended 30 June 2020
Note
CONSOLIDATED 2020
$
CONSOLIDATED 2019
$
Revenue
Cost of sale of goods and services
Gross profit
Interest income
Other income
Depreciation and amortisation expense
Directors and employee benefits expense
Marketing expense
Operations and administration expense
Other expenses from ordinary activities
Loss before income tax expense
Income tax (expense) / benefit
Loss after tax attributable to the owners of the Company
Other comprehensive (loss) net of tax
Items that may be reclassified to profit or loss
Items that will not be reclassified to profit or loss
3
4
3
5
5
5
5
6
18,608,279
(13,767,131)
4,841,148
74,483
6,118
(247,375)
(4,135,532)
(558,614)
(2,223,851)
(1,774,534)
(4,018,157)
941,561
(3,076,596)
-
-
16,864,323
(10,952,724)
5,911,599
15,551
-
(65,886)
(2,649,099)
(635,847)
(1,134,386)
(1,551,858)
(109,926)
25,761
(84,165)
-
-
Total comprehensive loss for the year attributable to the
owners of the Company
(3,076,596)
(84,165)
(Loss) per share
Basic and diluted loss per share (cents)
21
(0.33)
(0.01)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes, which form an integral part of the final annual report
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ANNUAL REPORT – FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
Note
CONSOLIDATED 2020
$
CONSOLIDATED 2019
$
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets - prepayments
Total current assets
Non-current assets
Plant and equipment
Deferred tax assets
Intangible assets
Right of use assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Employee provisions
Lease liabilities
Other liabilities
Total current liabilities
Non-current liabilities
Employee provisions
Deferred tax liabilities
Lease liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
26
10
13
6
12
15
11
17
16
14
17
6
16
18 (a)
18 (c)
19
15,947,957
3,833,386
444,511
20,225,854
240,753
1,256,413
17,401,996
309,191
19,208,353
39,434,207
2,126,891
2,370,510
176,472
4,734,338
9,408,211
149,458
-
139,377
-
288,835
9,697,046
29,737,161
41,066,915
-
(11,329,754)
29,737,161
3,171,843
3,422,922
277,014
6,871,779
157,649
377,272
17,450,475
-
17,985,396
24,857,175
1,698,540
1,527,349
-
8,270,194
11,496,083
59,653
27,500
-
31,353
118,506
11,614,589
13,242,586
20,787,188
684,000
(8,228,602)
13,242,586
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes, which
form an integral part of the final annual report.
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ANNUAL REPORT – FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2020
CONSOLIDATED
Balance as at 1 July 2018
Loss for the year
Other comprehensive income, net of income tax
Total comprehensive loss for the year
Shares issued during the year
Options issued during the year
Balance as at 30 June 2019
CONSOLIDATED
Balance as at 1 July 2019
Cumulative adjustment upon adoption of new
accounting standard AASB 16 - lease
Balance as at 1 July 2019 restated
Loss for the period
Other comprehensive income, net of income tax
Total comprehensive loss for the period
Shares issued during the period
Transaction costs
Issued capital
Reserves
Accumulated
losses
Total equity
10,793,683
684,000
(8,144,437)
3,333,246
-
-
9,993,505
-
-
-
-
-
-
(84,165)
-
(84,165)
-
-
(84,165)
-
(84,165)
9,993,505
-
20,787,188
684,000
(8,228,602)
13,242,586
20,787,188
684,000
(8,228,602)
13,242,586
-
20,787,188
-
684,000
-
-
-
20,567,727
(972,000)
-
-
-
-
-
(24,556)
(8,253,158)
(3,076,596)
-
(3,076,596)
-
-
-
-
(24,556)
13,218,030
(3,076,596)
-
(3,076,596)
20,567,727
(972,000)
-
-
(11,329,754)
29,737,161
Transfer in/(out) – exercise of options
684,000
(684,000)
Options issued during the period
Balance as at 31 December 2019
-
41,066,915
-
-
The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes, which
form an integral part of the final annual report.
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STATEMENT OF CASH FLOWS
For the year ended 30 June 2020
ANNUAL REPORT – FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
Note
CONSOLIDATED 2020
$
CONSOLIDATED 2019
$
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs and low value lease payments
Net cash inflows (outflows) from operating activities
26
Cash flows from investing activities
Payments for plant and equipment
Acquisition of business, net of cash acquired
Payment of contingent consideration – Oncall Systems Ltd
Net cash (outflows) from investing activities
Cash flows from financing activities
Net of proceeds from issues of equity securities
Proceeds from borrowing
Repayment of principal on lease liabilities – AASB 16
Repayments of borrowings
Net cash inflows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
26
20,542,868
(22,555,820)
74,483
(78,707)
(2,017,176)
(123,821)
-
(238,219)
(362,040)
15,362,156
-
(175,473)
(31,353)
15,155,330
12,776,114
3,171,843
15,947,957
16,469,206
(14,493,798)
15,551
-
1,990,959
(264,776)
(1,476,032)
-
(1,740,808)
-
92,015
-
(60,662)
31,353
281,504
2,890,339
3,171,843
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes, which form an
integral part of the final annual report.
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ANNUAL REPORT – NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2020
1.
GENERAL INFORMATION
Alcidion Group Limited (“Alcidion” or the “Group” or, the “Company”) is a limited company incorporated in Australia. The
core of Alcidion’s business model is to create intellectual property in the form of Clinical Decision Support Systems (CDSS)
software developed to improve the quality of care for all patients and improve the productivity of clinicians and care
teams.
The Company’s software is bundled with other technologies and services to create complete clinical and business
solutions for health care providers. In short, Alcidion builds, sells, delivers, hosts and supports solutions for health care
provider organisations in Australia, the UK and New Zealand.
2.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements comprise the consolidated financial statements of the Company and its controlled entities
(collectively the Group).
The financial statements were authorised for issue by the directors on 20 August 2020.
2.1 Basis of preparation
The Company is a for profit entity. Material accounting policies adopted in the preparation of these financial statements
are presented below. They have been consistently applied unless otherwise stated.
2.1.1
Statement of compliance
These financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) and in
compliance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB), and the Corporations Act 2001 (Cth).
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report
containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance
with AASBs ensures that the financial statements and notes also comply with IFRS as issued by the IASB.
The consolidated financial statements have been prepared on an accrual basis, except for cashflow information and are
based on historical costs. Historical cost is generally based on the fair values of the consideration given in exchange for
goods and services.
The financial statements have been prepared on a going concern basis, which contemplates the continuity of normal
business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.
2.1.2
Comparative figures
Where required by Accounting Standards, comparative figures have been adjusted to conform with changes in
presentation for the current financial year.
2.2 Amendments to Accounting Standards and new interpretations that are mandatorily
effective for the current reporting Period
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting
Standards Board (the AASB) that are relevant to their operations and are effective for the current year.
The Group had to change its accounting policy and make adjustments as a result of adopting AASB16: Leases. The impact
of this standard and the respective accounting policies is disclosed in Note 2.2.1
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2.2.1 Changes in Accounting Policies
This note describes the nature and effect of the adoption of AASB 16: Leases on the Group’s financial statements and
discloses the new accounting policies that have been applied from 1 July 2019, where they are different to those applied
in prior periods.
a. Leases
The Group as lessee
At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a lease present, a right-of-
use asset and a corresponding lease liability are recognised by the Group where the Group is a lessee. However, all
contracts that are classified as short-term leases (ie. a lease with a remaining lease term of 12 months or less) and leases
of low-value assets are recognised as an operating expense on a straight-line basis over the term of the lease.
Initially the lease liability is measured at the present value of the lease payments still to be paid at the commencement
date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily determined,
the Group uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as follows:
-
-
-
-
-
-
fixed lease payments less any lease incentives;
variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options, if the lessee is reasonably certain to exercise the options;
lease payments under extension options, if the lessee is reasonably certain to exercise the options; and
payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate
the lease.
The right-of-use assets are recognised at an amount equal to the lease liability at the initial date of application, adjusted
for previously recognised prepaid or accrued lease payments. The subsequent measurement of the right-of-use assets is
at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset, whichever is the shortest.
Where a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group
anticipates to exercise a purchase option, the specific asset is depreciated over the useful life of the underlying asset.
Initial Application of AASB 16: Leases
The Group has adopted AASB 16: Leases retrospectively with the cumulative effect of initially applying the standard,
recognised as an adjustment to the opening balance of retained earnings as at 1 July 2019. Therefore, the comparative
information has not been restated and continues to be reported under AASB 117: Leases.
The Group has recognised a lease liability and right-of-use asset for all leases (with the exception of short-term and low-
value leases) recognised as operating leases under AASB 117: Leases where the Group is the lessee. Lease liabilities are
measured at the present value of the remaining lease payments. The Group's incremental borrowing rate as at 1 July
2019 was used to discount the lease payments. The Group’s weighted average incremental borrowing rate on 1 July 2019
applied to the lease liabilities was 5.23%.
The associated right-of-use assets for leases were measured on a retrospective basis as if the new rules had always
applied. The difference between the Right of Use Assets and Lease Liabilities as at 1 July 2019 is $24,556, which has been
recognised as an adjustment to the opening balance of the Accumulated Losses on that date. Refer to Notes 15 and 16.
2.3
Principles of consolidation
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls and
entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity
and has then ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully
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FOR YEAR ENDED 30 JUNE 2020
consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between the entities in the consolidated entity
are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with
the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly
in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss
and other comprehensive income, statement of financial position and statement of changes in equity of the consolidated
entity. Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results
in a deficit balance.
Where the consolidated entity losses control over a subsidiary, it derecognises the assets including goodwill, liabilities
and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity.
The consolidated entity recognises the fair value of the consideration received and the fair value of any investment
retained together with any gain or loss in profit or loss.
2.4
Taxation
2.4.1
Income tax
The income tax expense / (income) for the year comprises current income tax expense/(income) and deferred tax
expense/(income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable
income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore
measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year
as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to
items recognised outside profit or loss or arising from a business combination.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have
been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial
recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable
profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset
is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their
measurement also reflects the manner in which management expects to recover or settle the carrying amount of the
related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be
controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where
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FOR YEAR ENDED 30 JUNE 2020
it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur
in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
2.4.2 Goods and Services Tax (GST) / Value Added Tax (VAT)
Revenues, expenses, and assets are recognised net of the amount of GST (in the case of Australian and New Zealand
business operations) and VAT (in the case of UK business operations), except where the amount of GST/VAT incurred is
not recoverable from the taxation authority. In these circumstances, the GST/VAT is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST/VAT.
The net amount of GST/VAT recoverable from, or payable to, the taxation authority is included as a current asset or
liability in the statement of financial position.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST/VAT component of investing
and financing activities, which are disclosed as operating cash flows included in receipts from customers and R&D rebate
received or payments to suppliers and employees.
2.5
Plant and equipment
2.5.1 Recognition and measurement
Items of plant and equipment are measured on the cost basis and carried at cost less accumulated depreciation (see
below) and impairment losses (see accounting policy 2.6 Impairment of non-financial assets). In the event the carrying
amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down
immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss or as a
revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is
made when impairment indicators are present.
Cost includes expenditure that is directly attributable to the acquisition of the asset.
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not more than the
recoverable amount from these assets. The recoverable amount is assessed based on the expected net cash flows that
will be received from the asset’s employment and subsequent disposal. The expected net cash flows have not been
discounted to their present values in determining recoverable amounts.
Where parts of an item of plant and equipment have different useful lives, they are accounted for as separate items of
plant and equipment.
2.5.2
Subsequent costs
The cost of replacing part of an item of plant and equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured
reliably. Any costs of the day-to-day servicing of plant and equipment are recognised in the statement of profit or loss
and other comprehensive income as an expense as incurred.
2.5.3
Depreciation
Depreciation is charged to the statement of profit or loss and other comprehensive income on a diminishing value or
straight-line basis over the asset's useful life to the consolidated group commencing from the time the asset is held ready
for use.
Depreciation rates and methods are reviewed annually for appropriateness. The depreciation rates used for the current
and comparative period are:
Class of fixed asset
Depreciation rate (%)
Computer equipment
Furniture and fittings
25 – 66.67
10 - 25
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The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposal of an item of plant and equipment are determined by comparing the proceeds from disposal
with the carrying amount of plant and equipment and are recognised net within “other income” in the Statement of
profit or loss and other comprehensive income.
2.6
Impairment of non-financial assets
The carrying amounts of the Group's non-financial assets, other than deferred tax assets (see accounting policy 2.3.1) are
reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists,
then the asset's recoverable amount is estimated.
An impairment loss is recognised if the carrying amount of an asset or a cash-generating unit exceeds its recoverable
amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are
independent from other assets and groups. Impairment losses are recognised in the statement of profit or loss and other
comprehensive income, unless the asset has previously been revalued, in which case the impairment loss is recognised
as a reversal to the extent of that previous revaluation with any excess recognised through the statement of profit or loss
and other comprehensive income. Impairment losses recognised in respect of cash-generating units are allocated first to
reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other
assets in the unit on a pro rata basis.
The recoverable amount of an asset or cash-generating unit is the greater of its fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For
an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-
generating unit to which the asset belongs.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to
determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount
does not exceed the carrying amount that would have been determined, net of depreciation and amortisation, if no
impairment loss had been recognised.
2.7
Financial instruments
2.7.1
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to
the instrument. For financial assets, this is equivalent to the date that the entity commits itself to either the purchase or
sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified
“at fair value through profit or loss”, in which case transaction costs are expensed to profit or loss immediately. Where
available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques
are adopted. Trade receivables are initially measured at the transaction price if the trade receivables do not contain a
significant financing component or if the practical expedient was applied.
Classification and Subsequent Measurement
2.7.2
Financial Liabilities
A financial liability is measured at fair value through profit and loss if the financial liability is:
-
-
a contingent consideration of an acquirer in a business combination to which AASB 3: Business Combinations
applies;
held for trading; or
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-
initially designated as at fair value through profit or loss.
All other financial liabilities are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest
expense in profit or loss over the relevant period. The effective interest rate is the internal rate of return of the financial
asset or liability. That is, it is the rate that exactly discounts the estimated future cash flows through the expected life of
the instrument to the net carrying amount at initial recognition.
Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are not part of
a designated hedging relationship are recognised in profit or loss.
The change in fair value of the financial liability attributable to changes in the issuer's credit risk is taken to other
comprehensive income and are not subsequently reclassified to profit or loss. Instead, they are transferred to retained
earnings upon derecognition of the financial liability. If taking the change in credit risk in other comprehensive income
enlarges or creates an accounting mismatch, then these gains or losses should be taken to profit or loss rather than other
comprehensive income.
A financial liability is derecognised when it is extinguished (i.e. when the obligation in the contract is discharged, cancelled
or expires). An exchange of an existing financial liability for a new one with substantially modified terms, or a substantial
modification to the terms of a financial liability is treated as an extinguishment of the existing liability and recognition of
a new financial liability. The difference between the carrying amount of the financial liability derecognised and the
consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit
or loss.
Financial Assets
A financial asset that meets the following conditions is subsequently measured at amortised cost:
-
-
the financial asset is managed solely to collect contractual cash flows; and
the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and
interest on the principal amount outstanding on specified dates.
A financial asset that meets the following conditions is subsequently measured at fair value through other comprehensive
income:
-
-
the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and
interest on the principal amount outstanding on specified; and
the business model for managing the financial assets comprises both contractual cash flows collection and the
selling of the financial asset.
By default, all other financial assets that do not meet the measurement conditions of amortised cost and fair value
through other comprehensive income are subsequently measured at fair value through profit or loss.
The initial designation of the financial instruments to measure at fair value through profit or loss is a one-time option on
initial classification and is irrevocable until the financial asset is derecognised.
A financial asset is derecognised when the holder's contractual rights to its cash flows expires, or the asset is transferred
in such a way that all the risks and rewards of ownership are substantially transferred. On derecognition of a financial
asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration
received and receivable is recognised in profit or loss.
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits
held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and
bank overdrafts. Bank overdrafts, if any, are shown within short-term borrowings in current liabilities on the Statement
of financial position.
Trade and other receivables
Receivables are usually settled within 60 days. Receivables expected to be collected within 12 months of the end of the
reporting period are classified as current assets. All other receivables are classified as non-current assets.
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Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within
30 days.
The Group has applied the simplified approach measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
which are unpaid and stated at their amortised cost. The amounts are unsecured and are generally settled on 30 day
terms.
2.7.3
Impairment of financial assets
A financial asset (or a group of financial assets) is deemed to be impaired if, and only if, there is objective evidence of
impairment as a result of one or more events (a “loss event”) having occurred, which has an impact on the estimated
future cash flows of the financial asset(s).
In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors or a group
of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments;
indications that they will enter bankruptcy or other financial reorganisation; and changes in arrears or economic
conditions that correlate with defaults. Impairment of trade receivables is determined using the simplified approach in
AASB 9 which uses an estimation of lifetime expected losses.
For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is used to
reduce the carrying amount of financial assets impaired by credit losses. After having taken all possible measures of
recovery, if management establishes that the carrying amount cannot be recovered by any means, at that point the
written-off amounts are charged to the allowance account or the carrying amount of impaired financial assets is reduced
directly if no impairment amount was previously recognised in the allowance account.
When the terms of financial assets that would otherwise have been past due or impaired have been renegotiated, the
Group recognises the impairment for such financial assets by taking into account the original terms as if the terms have
not been renegotiated so that the loss events that have occurred are duly considered.
2.7.4
Finance income and expenses
Finance income comprises interest income on funds invested, gains on the disposal of financial assets and changes in the
fair value of financial assets at fair value through profit or loss. Interest income is recognised as it accrues in profit or loss,
using the effective interest method.
Foreign currency gains and losses are reported on a net basis.
2.8
Employee benefits
2.8.1
Short-term employee benefits
Provision for employee benefits for wages, salaries and annual leave that are expected to be settled wholly within 12
months of the reporting date represent present obligations resulting from employees' services provided to the reporting
date and are calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects
to pay at the reporting date including related payroll on-costs, such as worker’s compensation insurance and payroll tax.
2.8.2 Other long-term employee benefits
The Group's obligation in respect of long-term employee benefits is the amount of future benefit that employees have
earned in return for their service in the current and prior periods plus related on-costs; that benefit is discounted to
determine its present value. The discount rate applied is determined by reference to market yields on high quality
corporate bonds at the report date that have maturity dates approximating the terms of the Group’s obligations.
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2.8.3
Retirement benefit obligations: Defined contribution superannuation funds
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions onto a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to
defined contribution superannuation funds are recognised as an expense in the statement of profit or loss and other
comprehensive income as incurred.
2.8.4
Equity-settled compensation
The Group operates an employee share option plan. The fair value of options granted is recognised as an employee
expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period
during which the employees become unconditionally entitled to the options. The fair value of the options granted is
measured using the Black-Scholes pricing model, considering the terms and conditions upon which the options were
granted. The amount recognised is adjusted to reflect the actual number of share options that vest except where
forfeiture is only due to market conditions not being met.
2.9
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is
probable that an outflow of economic benefits will result, and that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the
reporting period.
2.10 Earnings per Share
Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the
parent company as the numerator, ie no adjustments to profits were necessary in respect of the reported figures.
2.11 Revenue and other income
The core principle of AASB 15 is that revenue is recognised on a basis that reflects the transfer of promised goods or
services to customers at an amount that reflects the consideration the Group expects to receive in exchange for those
goods or services.
Revenue is recognised by applying a five-step process outlined in AASB 15 which is as follows:
Step 1: Identify the contract with a customer;
Step 2: Identify the performance obligations in the contract and determine at what point they are satisfied;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations;
Step 5: Recognise revenue as the performance obligations are satisfied.
Following the adoption of AASB 15, on 1 July 2018, the Group’s revenue recognition accounting policy is that:
The performance obligation for the Group’s licensed software is satisfied when the software has been installed and is
available for use the customer. This occurs in two stages, first when the software is initially installed and is available for
the customer to use and secondly when implementation services have ensured that the software is appropriately
configured and operating materially as contractually required and therefore can be deployed for widespread use by the
customer. Software licence revenue is recognised across these two delivery milestones rather than evenly over the term
of the software licence which typically ranges from 12 to 60 months. Implementation fee revenue is recognised over the
implementation period (generally 3 to 12 months) as services are rendered. Ongoing revenue from support and
maintenance services provided by Alcidion in respect of its licenced software is recognised as it is consumed (month by
month) over the contracted term for these services, which is typically from 12 to 60 months, as aligned with licence term.
.
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All revenue is stated net of the amount of GST or VAT (Note 2.4.2 Goods and Services Tax (GST) / Value Added Tax (VAT)).
2.12
Segment reporting
The Group operates as a single operating segment as there is only one primary line of business, which is the development,
delivery under licence, implementation, support and maintenance of the Group’s integrated suite of software products
to its customers across the UK, Australia and New Zealand. All product management, software development, support
and maintenance as well as corporate management and shared services, are provided centrally to all Group operations.
Group Directors and management monitor and manage the Group using consolidated Group financial information.
Discrete financial accounts are not used to manage any part of the business and there are no intra-Group financial
transactions between different parts of the business.
2.13
Intangible assets
a. Goodwill and intellectual property
Goodwill and intellectual property are intangible assets with indefinite useful lives are not amortised, but are tested for
impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed
annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis. The Directors consider that intangible assets, other than patents and
trademarks, have indefinite useful lives because they expect that they will continue to generate cash inflows indefinitely.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognised in the Consolidated Statement of Profit or Loss and
Other Comprehensive Income when the asset is derecognised.
Goodwill and intellectual property arising on an acquisition of a business are carried at cost as established at the date of
the acquisition of the business less accumulated impairment losses, if any. For the purposes of impairment testing,
goodwill and intellectual property are allocated to each of the Group’s cash-generating units (or Groups of cash-
generating units) that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill and intellectual property have been allocated is tested for impairment annually,
or more frequently when there is indication that the unit may be impaired. If the recoverable amount of the cash-
generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of
any goodwill and intellectual property allocated to the unit and then to the other assets of the unit pro rata based on the
carrying amount of each asset in the unit. Any impairment loss for goodwill or intellectual property is recognised directly
in profit or loss in the Consolidated Statement of Profit or Loss and Other Comprehensive Income. An impairment loss
recognised for goodwill or intellectual property is not reversed in subsequent periods.
b.
Intangible assets other than goodwill
Trademarks and patents
Patents and trademarks are recognised at cost of acquisition. They have a finite life and are carried at cost less any
accumulated amortisation and any impairment losses. Patents and trademarks are amortised over their useful lives
ranging from 5 to 10 years.
2.14
Critical Accounting Estimates and Judgements
Management discusses with the Board the development, selection and disclosure of the Group's critical accounting
policies and estimates and the application of these policies and estimates. The estimates and judgements that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year are discussed below.
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2.14.1
Key Judgements
a. Performance obligations relating to revenue recognition under AASB 15
To identify a performance obligation under AASB 15, the promise must be sufficiently specific to be able to determine
when the obligation is satisfied. Management exercises judgement to determine whether the promise is sufficiently
specific by taking into account any conditions specified in the arrangement, explicit or implicit, regarding the promised
goods and services. In making this assessment, management includes the nature/type, cost/value, quantity and the
period of transfer related to the goods or services promised.
b. Leases under AASB 16
The lease term is defined as the non-cancellable period of a lease together with both periods covered by an option to
extend the lease if the lease is reasonably certain to exercise that option; and also periods covered by an option to
terminate the lease if the lessee is reasonably certain not to exercise that option. The decision on whether or not the
options to extend are reasonably going to be exercised is a key management judgement that the entity will make. The
Group determines the likeness to exercise on a lease-by-lease basis looking at various factors such as which assets are
strategic and which are key to future strategy of the entity.
c.
Impairment of intangible assets
The assessment of whether the value of intangible assets requires impairment is based on the choice of an appropriate
valuation method for determining the recoverable amount of the single CGU in accordance with AASB 136. Two possible
valuation methods can be used, either a value-in-use calculation using a discounted cash flow model or a valuation based
upon an assessed fair value less costs to sell. Due to the current investment for growth phase that the company is in,
management has determined that a valuation based on fair value less costs to sell is the most appropriate valuation
method to use. Of the potential valuation approaches that comply with the requirements of AASB 136 and the preference
for those based on observable market data, management has chosen market capitalisation as the most appropriate
primary measure of recoverable value, given the liquidity of ALC share trading, Alcidion’s selection as only one of five
health IT companies to be included in the new ASX All Technologies Index in February 2020, and the successful $16.2M
capital raising in November 2019 when institutions subscribed for new shares at $0.18 per share, which is above the
closing share price of $0.145 on 30 June 2020. Management did however also consider an alternative valuation measure
as a secondary check on the primary impairment test. This involved comparing Alcidion’s assessed valuation as a multiple
of its revenue (which was 7.7) against the average and median revenue multiples of 8 other listed software companies
for FY20 with market cap below $500M, which were 7.6 and 7.8 respectively.
d. Deferred tax asset from carried forward tax losses
Judgements and estimates are required when determining the recognition and measurement of deferred tax asset. The
Group has recognised a deferred tax asset in relation to unused tax losses and deductible temporary differences only to
the extent that this offsets deferred tax liabilities due to the inherent uncertainty surrounding forecasting taxable income
in primary industries, and therefore the Group’s ability to fully utilise tax losses.
With Alcidion UK taxable income transitioning from previous year losses to a taxable profit in FY20 management has
decided to recognise a deferred tax asset for the value of carried forward losses from prior year operations in the UK, as
sufficient future taxable profit is expected to be available over the next 5 years against which the benefits of the deferred
tax asset can be fully utilised.
The utilisation/recognition of tax losses in future periods will be recognised as a tax benefit in those future periods.
2.15
New, revised or amending Accounting Standards and Interpretations adopted
The Group has adopted all the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (AASB) that are that are relevant to their operations and are effective for the
current reporting period.
The Group had to change its accounting policies and make adjustments as result of adopting AASB16: Leases. The impact
of this standard and the respective accounting policies is disclosed in Note 2.2.1.
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Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 but
early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new
guidance on measurement that affects several Accounting Standards. Where the consolidated entity has relied on the
existing framework in determining its accounting policies for transactions, events or conditions that are not otherwise
dealt with under the Australian Accounting Standards, the consolidated entity may need to review such policies under
the revised framework. The Conceptual Framework has not been adopted for these FY2020 financial statements and at
this time, the application of the Conceptual Framework is not expected to have a material impact on the consolidated
entity’s financial statements.
2.16 Functional and presentation currency
The functional currency of each of the Group’s entities is the currency of the primary economic environment in which
that entity operates. The consolidated financial statements are presented in Australian Dollars (AUD), which is the Parent
Entity’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date
of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items
measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary
items measured at fair value are reported at the exchange rate at the date when fair values were determined. Exchange
differences arising on the translation of monetary items are recognised in profit or loss, except exchange differences that
arise from net investment hedges.
Group companies
The financial results and position of foreign operations, whose functional currency is different from the Group’s
presentation currency, are translated as follows: assets and liabilities are translated at exchange rates prevailing at the
end of the reporting period; income and expenses are translated at average exchange rates for the reporting period; and
all resulting exchange differences are recognised in other comprehensive income.
3.
REVENUE
Recurring income
Non-recurring income (i)
Grants (ii)
Foreign exchange gain or (loss)
Other income
Other revenue
Consolidated 2020
$
Consolidated 2019
$
10,401,522
8,149,741
-
57,016
18,608,279
7,841,950
8,990,163
50,000
(17,790)
16,864,323
6,118
-
(i)
Non-recurring income relates to discrete project work (as opposed to ongoing contracted services lasting longer than twelve months) and
software licence fees charged upfront at the beginning of the licence term rather than being charged annually over the licence term..
(ii) MTP Connect Grant revenue.
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4.
COST OF SALE OF GOODS AND SERVICES
Gross profit has been arrived at after charging the following direct costs as cost of sale of goods and services:
Service delivery staff costs
Sales staff and commissions
Development & support of current software
Hosting costs (i)
Cost of resold products and services
Other net costs of sales / delivery
Total cost of sale of goods and services
Consolidated 2020
$
Consolidated 2019
$
6,173,988
2,091,629
2,764,138
381,387
2,066,053
289,936
5,537,251
1,411,050
3,105,061
-
833,574
65,788
13,767,131
10,952,724
(i)
In 2019 hosting costs were classified as part of Operations and administration expenses.
5.
LOSS FROM OPERATIONS
Loss before income tax has been arrived at after charging the following specified expenses from continuing operations:
Depreciation and amortisation of non-current assets
247,375
65,886
Directors and employee benefits expense (i)
14,292,016
11,967,349
Consolidated 2020
$
Consolidated 2019
$
Superannuation expense (i)
Legal fees (ii)
M&A activities (ii)
Minimum lease payments from operating leases (iii)
873,271
121,247
63,230
33,862
735,112
105,248
101,562
58,931
(i)
(ii)
These amounts are the total directors and employee benefits expense that are included in the Cost of sale of goods and services and Directors
and employee benefits expense disclosed in the Statement of Profit or Loss and Other Comprehensive Income.
These expenses are included in the Operations and administration expense that is disclosed in the Statement of Profit or Loss and Other
Comprehensive Income.
(iii) This expense is included in the Other expenses from ordinary activities that is disclosed in the Statement of Profit or Loss and Other
Comprehensive Income.
6.
INCOME TAX
Income tax recognised in loss
Tax expense comprises:
Current tax (benefit) / expense
Deferred tax expense relating to the origination and reversal of temporary
differences and carried forward UK tax losses
Total tax benefit
Consolidated 2020
$
Consolidated 2019
$
-
(941,561)
(941,561)
2,541
(28,302)
(25,761)
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The prima facie income tax expense on pre-tax accounting loss from operations reconciles to the income tax expense in
the financial statements as follows:
Consolidated 2020
$
Consolidated 2019
$
(Loss) from operations
(4,018,157)
(109,926)
Income tax benefit calculated at 27.5%
Effect of different tax rates of group entities operating in different tax
jurisdictions
Effect of expenses exceeding income in determining taxable profit
Effect of expenses that are not deductible in determining taxable profit
Net effect of unused tax losses and temporary differences not recognised as
deferred tax assets
Net effect of temporary differences recognised as deferred tax assets
Net effect of carried forward tax losses as deferred tax assets
Tax effect of Alcidion Group DTA brought to account
Tax effect of MKM Health Pty Ltd DTL brought to account
Income tax expense/(benefit)
(1,104,993)
(8,951)
(30,230)
(40,499)
(269,901)
18,919
16,717
(7,030)
1,330,776
6,979
(209,380)
(698,031)
-
-
(941,561)
51,333
-
(50,531)
27,500
(25,761)
The tax rate used in the above reconciliation in respect to the income of group entities domiciled in Australia is the
corporate tax rate of 27.5% (2019: 27.5%) payable by Australian corporate entities on taxable profits under Australian
tax law. The tax rate used in the above reconciliation in respect to the income of group entities domiciled in New Zealand
is the corporate tax rate of 28% (2019: 28%) payable by New Zealand corporate entities on taxable profits under New
Zealand tax law. The tax rate used in the above reconciliation in respect to the income of group entities domiciled in the
UK is the corporate tax rate of 19% (2019: 19%) payable by UK corporate entities on taxable profits under England &
Wales tax law. In 2019, the Australian Taxation Office introduced legislation under which the corporate tax rate for
Companies satisfying the requirements to be assessed as a 'Small Business' reduced to 27.5%. To satisfy the requirements
of a 'Small Business' in the 2020 financial year, a Company must have annual turnover of less than $50,000,000 (2019:
$25,000,000). Alcidion Group Ltd has satisfied this requirement and is therefore eligible to apply the reduced income tax
rate of 27.5%.
Recognised deferred tax balances
The following deferred tax assets have been brought to account:
Employee benefits
Accrued expenses
Legal cost – non deductable
Carried forward tax losses UK
Deferred Tax Asset
Net temporary differences
Deferred Tax Liability
Consolidated 2020
$
444,084
Consolidated 2019
$
316,795
89,768
24,530
698,031
1,256,413
-
-
23,681
36,796
-
377,272
27,500
27,500
Key estimate of unrecognised Deferred Tax Assets: Deferred tax assets are recognised for deductible temporary
differences only if the consolidated entity considers it is probable that future taxable amounts will be available to utilise
those temporary differences and losses. A deferred tax asset has been recognised in respect of accumulated tax losses
for UK and some temporary differences as the realisation of the benefit is regarded as probable. The total tax losses
carried forward amount to $9,694,735 (2019: $5,294,416), including $3,673,847 total UK carried forward tax losses that
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has been recognised as a deferred tax asset. The balance of carried forward tax losses relating to Australian and New
Zealand operations ($6,020,888) have not been recognised as a deferred tax asset.
Franking Account: ($5,293,206) (2019: $5,967,642)
The Company’s franking account is in debit by the amount of $5,293,206. The debit balance has arisen due to the
accumulation of Research & Development Tax Incentive Refunds totalling $5,978,248 since the year ended 30 June 2005.
In accordance with section 205 of the Income Tax Assessment Act (ITAA) 1997, the Company is not subject to franking
deficits tax on this balance.
7.
KEY MANAGEMENT PERSONNEL DISCLOSURES
a) Details of key management personnel
The directors and executives of Alcidion Group Limited during the financial year were:
Directors
Ms Rebecca Wilson (Appointed Chair on 30 August 2019)
Mr Raymond Howard Blight (Resigned as Chair on 30 August 2019)
Professor Malcolm Pradhan
Mr Nicholas Paul Dignam
Ms Kate Quirke (Appointed CEO and Executive Director on 3 July 2018 then appointed Managing Director
from 25 January 2019)
Mr Simon Chamberlain (Appointed on 1 July 2019)
Executives
Mr Colin MacKinnon (Appointed on 3 July 2019 as Group Commercial Manager and assumed roles of Group
COO / CFO from 1 March 2019)
b) Key management personnel compensation
The aggregate compensation made to key management personnel of the Company is set out below:
Short-term employee benefits
Annual Leave
Post-employment benefits
Share-based payments
Consolidated 2020
$
Consolidated 2019
$
1,340,906
67,076
81,948
-
1,489,930
1,444,172
140,826
118,011
-
1,703,009
The compensation of each member of the key management personnel of the Company is set out in the
Remuneration Report.
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FOR YEAR ENDED 30 JUNE 2020
8.
SHARE-BASED PAYMENTS SHARE OPTIONS AND CONTINGENT SHARE RIGHTS
The Company provides an ownership-based compensation arrangement for its employees.
Each option issued under the arrangement converts into one ordinary share of Alcidion Group Limited on exercise. No
amounts are paid or payable by the recipient on receipt of the option. Options neither carry rights to dividends nor voting
rights. Options may be exercised at any time from the date of vesting to the date of their expiry. Vesting dates and
conditions are dependent on each arrangement as agreed to by the directors.
The number of options granted is at the sole discretion of the directors.
Incentive options issued to directors (executive and non-executive) are subject to approval by shareholders and attach
vesting conditions as appropriate.
No share-based payments were made during the current year.
There were no options over ordinary shares in the Company provided as remuneration to directors or key management
persons during the year.
Options
Consolidated 2020
$
Weighted average
exercise price
$
Number of
options
Consolidated 2019
$
Number of
options
Weighted average
exercise price
$
Balance at beginning of financial year
Granted during the financial year
Exercised during the period
Group’s options on acquisition
Group’s options foregone
Exercised during the financial year
Balance at end of the financial year
Exercisable at end of financial year
10,000,000
-
(10,000,000)
-
-
-
-
-
0.07
-
0.07
-
-
-
-
-
10,000,000
-
-
-
-
10,000,000
10,000,000
0.07
-
-
-
-
0.07
0.07
9.
REMUNERATION OF AUDITORS
Audit and review of the financial report for the Group (i)
William Buck
DSG UK
Non-audit services – William Buck
Consolidated 2020
$
Consolidated 2019
$
57,000
10,331
-
67,331
49,000
-
34,962
83,962
(i)
The 2020 auditor of Alcidion Group Limited, is William Buck (2019: William Buck).
The 2020 auditor of Alcidion UK Limited and Paticentrack UK Limited, is DSG UK
10.
TRADE AND OTHER RECEIVABLES
Trade accounts receivable
Total Trade and Other Receivables
Consolidated 2020
$
Consolidated 2019
$
3,833,386
3,833,386
3,422,922
3,422,922
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FOR YEAR ENDED 30 JUNE 2020
Trade receivables are non-interest bearing and generally on terms of 14-60 days. The receivables at reporting date have
been reviewed to determine whether there is any objective evidence that any of the receivables are impaired. An
allowance for credit loss is included for any receivable where the entire balance is not considered collectible. No
allowance for credit loss is required as of 30 June 2020 (2019: Nil).
Additional Information in relation to financial risks concerning or with a potential impact on financial assets and liabilities
is disclosed in Note 27 – Financial Instruments.
11.
TRADE AND OTHER PAYABLES
Goods and Services Tax / Value Added Tax
Trade payables (i)
Other
PAYG withholding
Consolidated 2020
$
Consolidated 2019
$
652,964
991,306
316,908
165,713
2,126,891
282,498
509,241
769,357
137,444
1,698,540
(i)
The average credit period on purchases of goods and services is 30 days. No interest is charged on the trade payables for the first 30 to 60 days
from the date of the invoice. Thereafter, interest may be charged at various penalty rates by some creditors. The group has financial risk
management policies in place to ensure that all payables are paid within the credit timeframe.
12.
INTANGIBLE ASSETS
Goodwill (i)
Intellectual Property (i)
Patents & Trademarks – at cost
Patents & Trademarks – accumulated amortisation
Balance at the End of Year (ii)
Consolidated 2020
$
15,370,962
1,714,244
341,177
(24,387)
17,401,996
Consolidated 2019
$
15,388,966
1,736,543
348,138
(23,172)
17,450,475
(i)
(ii)
Goodwill and Intellectual Property assets have been recognised on the acquisition of MKM Health Group during the
2019 financial year.
Reconciliation of Movements in Intangible Assets
Balance at the Beginning of the Year
Additional amounts arising from business acquisitions
Other movement in intangible assets
Amortisation Charged to intangible assets
17,450,475
-
(47,264)
(1,215)
1,072,805
16,374,939
3,858
(1,127)
Balance at the End of Year
17,401,996
17,450,475
KEY ESTIMATES AND ASSUMPTIONS: INTANGIBLE ASSETS
Intangible assets, other than goodwill and intellectual property, have finite useful lives. The current amortisation charges
for intangible assets are included under depreciation and amortisation expense as per the statement of profit and loss
and other comprehensive income.
Goodwill and intellectual property are tested for impairment at each reporting period in accordance with AASB136
Impairment of Assets. Management have determined that there is one CGU, being the single integrated business
operation that develops, licences, implements, sometime hosts and supports the one integrated suite of software
products for health care provider organisations in Australia, the UK and New Zealand. To assess whether goodwill and
intellectual property is impaired, the carrying amount of the CGU is compared to the recoverable amount, determined
based on the greater of its value in use and its recoverable value less costs of disposal.
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FOR YEAR ENDED 30 JUNE 2020
Due to the current investment for growth phase that the company is in, management has determined that a valuation
based on fair value less costs to sell is the most appropriate valuation method to use. Of the potential valuation
approaches that comply with the requirements of AASB 136 and the preference for those based on observable market
data, management has chosen market capitalisation as the most appropriate primary measure of recoverable value,
given the liquidity of ALC share trading, Alcidion’s selection as only one of five health IT companies to be included in the
new ASX All Technologies Index in February 2020, and the successful $16.2M capital raising in November 2019 when
institutions subscribed for new shares at $0.18 per share, which is above the closing share price of $0.145 on 30 June
2020. Management did however also consider an alternative valuation measure as a secondary check on the primary
assessment of recoverable value. This involved comparing Alcidion’s assessed valuation as a multiple of its revenue
(which was 7.7) against the average and median revenue multiples of 8 other listed software companies for FY20 with
market cap below $500M, which were 7.6 and 7.8 respectively
Closing share price (30 June 2020)
Common shares outstanding
Market capitalisation
Add Control Premium
Less Transaction Cost
Assessed Fair Value
Net Tangible Assets of Alcidion Group (as at 30 June 2020)
Intangible Assets
Impairment headroom
Value
$0.145
990,694,052
$143,650,638
$28,730,128
$1,000,000
$171,380,766
$12,335,165
$17,401,996
$141,643,605
The above analysis shows that the Assessed Fair Value of the single Alcidion CGU is substantially higher than the book
value of the CGU assets. Accordingly, management and the Directors are of the opinion that no impairment of the carry
value of intangible assets is necessary as at 30 June 2020 (2019: Nil).
13.
PLANT AND EQUIPMENT
Consolidated
Cost
Balance at 1 July 2019
Additions/(Disposal)
Balance at 30 June 2020
Accumulated depreciation and impairment
Balance at 1 July 2019
Net depreciation expense
Balance at 30 June 2020
Net book value
As at 30 June 2019
As at 30 June 2020
Computer
equipment at cost
$
Furniture and
fittings at cost
$
Total
$
319,006
99,273
418,279
250,509
35,205
285,714
68,497
132,565
232,240
24,548
256,788
143,088
5,512
148,600
89,152
108,188
551,246
123,821
675,067
393,597
40,717
434,314
157,649
240,753
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FOR YEAR ENDED 30 JUNE 2020
14. OTHER LIABILITIES
Income in advance (i)
Other payables
Contingent consideration MKM Health/Patientrack (ii)
Contingent consideration Oncall Systems Ltd. (iii)
Consolidated 2020
$
Consolidated 2019
$
4,734,338
-
-
-
4,734,338
3,771,433
3,048
4,000,000
495,713
8,270,194
(i)
(ii)
(iii)
Income in advance relates to invoices issued to customers, or physical cash received from customers for licencing, maintenance and
support services and other professional services to be carried out in future periods. The movement in income in advance is attributable
to payments received from customers in advance of services to be provided less the recognition of revenue from amounts received for
services provided during the year.
Contingent consideration relating to the acquisition of MKM Health Pty Ltd on 3 July 2018 calculated with reference to MKM Health /
Patientrack revenues and EBITDA achieved in the period from 3 July 2018 to 30 June 2019. This was satisfied 100% by issue of shares
at a deemed issue price of 5.05c per share.
Contingent consideration relating to the acquisition of Oncall Systems on 1 February 2018 was calculated with reference to Smartpage
related revenues achieved in the period from 1 February 2018 to 30 June 2019. This iwas satisfied as 40% cash payment and 60% by
the issue of shares at a deemed issue price of 4.92c per share.
15. RIGHT OF USE ASSETS
The Group's lease portfolio includes lease of buildings. These leases have an average term of 2 years.
a. Options to Extend or Terminate
Options to extend or terminate are contained in some of the property leases of the Group. These clauses provide the
Group opportunities to manage leases in order to align with its strategies. All of the extension or termination options are
only exercisable by the Group. The extension options or termination options which management were reasonably certain
to be exercised have been included in the calculation of the lease liability.
(i)
AASB 16 related amounts recognised in the statement of financial position:
Right-of-use assets
Leased buildings
Accumulated depreciation
Movement in carrying amounts:
Leased buildings:
Recognised on initial application of AASB 16
Depreciation expense for the year ended
Net carrying amount
CONSOLIDATED
30 June 2020
$
491,322
(182,131)
309,191
491,322
(182,131)
309,191
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ANNUAL REPORT – NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
(ii)
AASB 16 related amounts recognised in the statement of profit or loss:
Depreciation charge related to right-of-use assets
Interest expense on lease liabilities
Low-value asset lease expense
(iii)
Reconciliation of Right of Use Assets:
Finance lease assets as at 30 June 2019
IFRS 16 transition adjustment
Right-of-use assets as at 1 July 2019
Additions during the year
Amortisation and depreciation
Right-of-use assets as at 30 June 2020
As at 30 June 2020
$
182,131
3,582
33,262
As at 1 July 2019
$
-
491,322
491,322
-
(182,131)
309,191
16. LEASE LIABILITIES
Lease liability (current)
Lease liability (non-current)
Consolidated 2020
$
Consolidated 2019
$
176,472
139,377
-
-
(a) Reconciliation of Opening Lease Liabilities
Operating lease commitments disclosed as at 30 June 2019
Less: Short term lease (<12 months) not recognised
Less: Impact of discounting
Lease liability recognised on adoption of AASB 16
Add: Finance lease liabilities previously recognised
Total lease liabilities at 1 July 2019
As at 1 July 2019
$
937,569
(434,446)
(32,047)
471,076
-
471,076
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17.
EMPLOYEE PROVISIONS
Current
Annual leave
Long service leave
Other – bonus and commission payable
Non-current
Long service leave
Total employee provisions
18.
ISSUED CAPITAL
(a)
Issued capital
990,694,052 fully paid ordinary shares
(2019: 805,671,138)
ANNUAL REPORT – NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
Consolidated 2020
$
Consolidated 2019
$
925,605
590,555
854,350
2,370,510
149,458
2,519,968
548,310
532,674
446,365
1,527,349
59,653
1,587,002
Consolidated
2020
$
Consolidated
2019
$
41,066,915
20,787,188
Balance at 1 July 2019
Shares issued during the year
Balance at 30 June 2020
Consolidated
2020
Consolidated
2019
No.
805,671,138
185,022,914
990,694,052
$
20,787,188
20,279,727
41,066,915
No.
607,779,957
197,891,181
805,671,138
$
10,793,683
9,993,505
20,787,188
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long-term
shareholder value and ensure that the Group can fund its operations and continue as a going concern.
The Group’s debt and capital include ordinary share capital and financial liabilities, supported by financial assets.
The Group is not subject to any externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior
year.
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FOR YEAR ENDED 30 JUNE 2020
(b)
Contingent share rights
Class A Contingent Share Rights
Balance at 1 July
Share rights foregone for non-performance
of Milestone 1
Balance at 30 June
Class B Contingent Share Rights
Balance at 1 July
Share rights foregone for non-performance
of Milestone 1
Balance at 30 June
Consolidated
2020
Consolidated
2019
No.
$
No.
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
148,387,096
(148,387,096)
-
-
-
-
-
-
Each Class B Contingent shares rights were be converted to one fully paid ordinary shares on Alcidion Group achieving
$15,000,000 in revenue (audited) over 12 consecutive months within 36 months from the 29th February 2016 (re-
admission of Alcidion Group to the ASX). This did not occur and as such these rights were forfeited during the 2019
financial year.
(c)
Reserves (i)
Balance at beginning of financial year
Options exercised
Balance at end of financial year
(i)
The reserve records the value of share-based payments provided.
(d)
Movements in options on issue
Beginning of the financial year
Options Foregone
Options Granted
Options exercised
End of the financial year
19. ACCUMULATED LOSSES
Consolidated
2020
$
Consolidated
2019
$
684,000
(684,000)
-
684,000
-
684,000
2020 No. of options
2019 No. of options
10,000,000
-
-
(10,000,000)
-
10,000,000
-
-
-
10,000,000
Balance at beginning of financial year
Cumulative adjustment upon adoption of new accounting standard AASB 16 - lease
(Loss) attributable to members of the entity
Balance at end of financial year
Consolidated
2020
$
Consolidated
2019
$
(8,228,602)
(24,556)
(3,076,596)
(11,329,754)
(8,144,437)
-
(84,165)
(8,228,602)
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FOR YEAR ENDED 30 JUNE 2020
20. DIVIDENDS
There were no dividends paid or proposed during the year.
21.
LOSS PER SHARE
Basic earnings (loss) per share (cents):
From continuing operations
Loss after tax used in calculating basic earnings per share
2020
Cents per share
2019
Cents per share
(0.33)
(0.01)
Consolidated
2020
$
Consolidated
2019
$
(3,076,596)
(84,165)
2020
No.
2019
No.
Weighted average number of ordinary shares used in calculating basic earnings per
share
934,936,738
805,671,138
The weighted average number of shares for the purposes of the calculation of diluted earnings per share can be
reconciled to the weighted average number of ordinary shares used in the calculation of basic earnings per share as
follows:
Weighted average number of shares used in basic earnings per share
Shares deemed to be issued for no consideration in respect of share-based payments
Weighted average number of shares used in diluted earnings per share
934,936,738
Nil
934,936,738
805,671,138
Nil
805,671,138
30 Jun 2020
30 Jun 2019
22. RELATED PARTY DISCLOSURES
(a)
Key management personnel remuneration
Details of key management personnel remuneration are disclosed in Note 7 to the financial statements.
(b)
Loans to key management personnel and their related parties
There have been no loans to key management personnel during the year.
(c)
Other transactions with key management personnel
WE Communications was paid $181,283 for Investor Relation services, a company in which non-executive
director Rebecca Wilson has an interest. Balance payable as at 30 June 2020 is $29,772.
Bright Ventures was paid $33,916.56 for strategic advisory services provided by non-executive director Simon
Chamberlain. Balance payable as at 30 June 2020 is nil.
Transactions between related parties are on normal commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated.
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FOR YEAR ENDED 30 JUNE 2020
23.
CONTINGENCIES
In the opinion of the Directors, the Group did not have any contingent liabilites or contingent assets as at 30 June 2020
(2019: nil).
The Company has provided security as follows; first registered Company charge by Alcidion Corporation Pty Ltd over the
whole of its assets and undertakings including uncalled capital for any debt incurred that is not recoverable to its bankers.
At 30 June 2020, credit card balance used is $21,194 (unused: $133,806).
24.
SEGMENT REPORTING
The Group operates in the healthcare industry in Australia, New Zealand and the UK. For management purposes, the
Group is organised into one main operating segment which involves the provision of healthcare software solutions and
services in all these territories. All the Group’s activities are inter-related and discrete financial information is reported
to the Board (Chief Operating Decision Maker) as a single segment. Accordingly, all significant operating decisions are
based upon analysis of the Group as one segment. The financial results from this segment are equivalent to the financial
statements of the Group as a whole.
Basis of accounting for purposes of reporting by operating segments
a. Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief operating decision makers with
respect to operating segments, are determined in accordance with accounting policies that are consistent with those
adopted in the annual financial statements of the Group.
b.
Intersegment transactions
There were no intersegment sales during FY2020.
c. Segment information
(i)
(ii)
Group Performance – No separate Group performance has been presented in this report as the Board
receives only a consolidated Group performance report which is the equivalent to the statement of Profit
or Loss and Other Comprehensive Income of the Group as a whole.
Group assets and liabilities – No separate Group asset and liabilities have been presented in this report as
the Board only receives a consolidated asset and liabilities report which is the equivalent to the statement
of financial position of the Group as a whole.
(iii)
Revenue by geographical region
Australia / New Zealand
United Kingdom
Total revenue
(iv)
Major customers
Consolidated 2020
$’000
Consolidated 2019
$’000
14,606
4,002
18,608
14,208
2,670
16,864
The Group has a number of customers to whom it provides both products and services. The Group does not
have a single customer who accounts for more than 10% of total revenue
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FOR YEAR ENDED 30 JUNE 2020
(v)
Timing of revenue recognition
Australia / New Zealand
United Kingdom
Total revenue
Consolidated 2020
$’000
Goods transferred at
a point in time
Services transferred
over time
7,282
3,020
10,302
7,324
982
8,306
25.
SUBSEQUENT EVENTS
The Company has had the following subsequent events post 30 June 2020:
a.
In July 2020, Alcidion signed:
two contracts with Murrumbidgee Local Health District with a combined value of $686K to continue
using Miya Precision including the MEMRe mobile clinical application until 31 December 2020.
Intended use includes monitoring COVID-19 patients in hospital and remotely;
a two year $1.3M extension to its IT support services contract with ACT Health from 1 January
2021; and
a five year $1.52M contract with NHS Lanarkshire in Scotland to deploy Alcidion’s Patientrack
product across the whole health board;
b.
In August 2020, Alcidion was awarded a place on the UK NHSX £3M Clinical Communications Procurement
Framework which will make it quicker and easier for NHS trusts to procure Alcidion’s Smartpage messaging
system without tendering, as part of the NHS’ commitment to replace old paging systems across all NHS
trusts.
26. NOTES TO THE STATEMENT OF CASH FLOWS
(a)
Reconciliation of cash and cash equivalents
Cash and cash at bank
Consolidated
2020
$
15,947,957
Consolidated
2019
$
3,171,843
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ANNUAL REPORT – NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
(b)
Reconciliation of loss for the year to net cash flows from operating activities
(Loss) for the year after income tax
Depreciation and amortisation of non-current assets
(3,076,596)
222,848
(84,165)
65,886
Changes in net assets and liabilities, net of effects from
acquisition and disposal of businesses:
(Increase)/decrease in assets:
Trade and other receivables
Other Assets
Intangible Assets
Deferred Tax Assets
Increase/(decrease) in liabilities:
Trade and other payables
Provisions
Deferred Tax Liabilities
Other Liabilities
Net cash generated/(used) in operating activities
27.
FINANCIAL INSTRUMENTS
(a)
Financial risk management objectives
(410,464)
(167,497)
-
(879,141)
428,351
932,966
(27,500)
959,857
(2,017,176)
(1,893,731)
(215,317)
-
(256,895)
1,001,526
1,204,487
27,500
2,141,668
1,990,959
The Group enters into financial instruments, including derivative financial instruments. The Group’s financial
instruments consist mainly of deposits with banks, accounts receivables and payables. The totals for each
category of financial instruments is shown at Note 27(e).
(b)
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class of
financial asset, financial liability and equity instrument are disclosed in Note 2 to the financial statements.
(c)
Foreign currency risk management
The Company is exposed to foreign currency risk to the extent that the fair value or future cash flows of a financal
instrument fluctuates due to movement in foreign exchange rates of currenices in which the Group holds
financial instruments which are other than the AUD functional currency of the Group.
While the Group’s overseas operations hold financial assets and liabilities in NZD and GBP, there is very little
foreign currency risk associated with intercompany transactions or the required conversion of these financial
assets or liabilities to AUD as each overseas operation generates and holds sufficient financial assets in local
currency to meet local liabilities and there are no intercompany transactions or movement of financial assets
within the group that would create any significant foreign currency risk from currency conversion. Hedging is
therefore not required to manage foreign currency risk arising from currency conversion. The only foreign
currency risk arises from potential fluctuations in exchange rates used when converting financial asset and
liability instruments denominated in currencies other than AUD, when consolidating Group financials.
(d)
Interest rate risk management
In the prevailing low interest environment, the Company is exposed to minimal interest rate risk arising from
decisions to place funds at either fixed or floating interest rates. What risk does exist is managed by maintaining
an appropriate mix between fixed and floating rate products.
(e)
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and
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ANNUAL REPORT – NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.
The Group’s exposure and the credit ratings of its counterparties are continuously monitored.
The Group does not have any significant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics. The credit risk on liquid funds is limited because the counterparties
are banks with high credit-ratings assigned by international credit-rating agencies.
The quality of debtors is best monitored by the ageing of open invoices in accounts receivable.
Trade receivables are analysed as follows:
Not impaired:
-
-
Within trade terms
Past due but not impaired
Total trade receivables
Consolidated
2020 $
Consolidated
2019 $
3,508,044
325,342
3,833,386
3,175,933
246,989
3,422,922
Receivables that are neither past due nor impaired comprise customers with a long-term record of timely
payments and/or no recent history of default arising from financial difficulty.
Receivables that are past due but not impaired comprise customers which do not have any objective evidence
that the receivable may be impaired. Alcidion has actively engaged these customers and reasons for the invoices
remaining outstanding are being actively resolved.
An allowance for doubtful debts is recognised where Alcidion has identified objective evidence that an amount
owing may not be recoverable, mainly arising from observed financial difficulty of a customer.
Analysis of age of trade receivables:
Consolidated:
2020
Not Past Due
60-90 days
> 90 days
Total
Trade receivables
3,508,044
314,727
3,508,044
314,727
10,615
10,615
3,833,386
3,833,386
Not Past Due
60-90 days
> 90 days
Total
Total
2019
Trade receivables
3,175,933
Total
3,175,933
79,638
79,638
167,351
167,351
3,422,922
3,422,922
The Group measures the allowance for credit losses for trade receivables consistent with AASB 9. The expected
credit losses on trade receivables are estimated using a provision matrix by reference to past default experience
of the debtor and an analysis of the debtor's current financial position, adjusted for factors that are specific to
the debtor, general economic conditions of the industry in which the debtor operates and an assessment of both
the current and the forecast direction of conditions at the reporting date.
As at 30 June 2020, there were no expenses recognised during the financial year then ended for the write-off
of receivables or provision for doubtful debts (2019: Nil).
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ANNUAL REPORT – NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
(f)
Liquidity risk management
Liquidity risk arises from the possibility that the Group may encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities.
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of
financial assets and liabilities. It is a policy of the Group that creditors are paid within 30 days.
Maturity profile of financial instruments
The following table details the Company’s exposure to liquity risk.
2020
Financial assets:
Cash and cash equivalents
Trade and other receivables
Financial liabilities:
Trade and other payables
Lease liabilities
2019
Financial assets:
Cash and cash equivalents
Trade and other receivables
Financial liabilities:
Trade and other payables
Contingent consideration
Funds
available on
demand
$
Expected maturity dates
1-5
years
$
< 1 year
$
5+
years
$
Total
$
15,859,582
-
15,859,582
-
-
-
3,082,435
-
3,082,435
-
-
-
88,375
3,833,386
3,921,761
2,126,891
176,472
2.303.363
89,408
3,422,922
3,512,330
1,698,540
4,495,713
6,194,253
-
-
-
-
139,377
139,377
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15,947,957
3,833,386
19,781,343
2,126,891
315,849
2,442,740
3,171,843
3,422,922
6,594,765
1,698,540
4,495,713
6,194,253
The amounts listed above equate to fair value. The cashflows in the maturity analysis above are not expected to
occur significantly earlier than disclosed.
57
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ANNUAL REPORT – NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
28.
INFORMATION RELATING TO ALCIDION GROUP LIMITED (THE PARENT)
The following information has been extracted from the books and records of the parent and has been prepared in
accordance with Australian Accounting Standards.
All assets listed below equate to fair value.
Statement of financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Statement of Profit or Loss & Other Comprehensive Income
Total Loss for the year
Total comprehensive loss for the year
2020
$
2019
$
12,704,934
38,619,652
51,324,586
54,482
27,764,048
27,818,530
730,286
149,458
879,744
4,654,681
1,492,641
6,147,322
50,444,842
21,671,208
66,566,260
33,144,992
-
1,193,619
(16,121,418)
(12,667,403)
50,444,842
21,671,208
2020
$
3,076,596
2019
$
1,616,546
3,076,596
1,616,546
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ANNUAL REPORT – NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
29.
INTERESTS IN CONTROLLED ENTITIES
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries:
Name of Entity
Country of Incorporation
2020
2019
Percentage Owned (%)
Alcidion Corporation Pty Ltd
Oncall Systems Ltd.
Alcidion Aus Pty Ltd (MKM Health Pty Ltd)
Patientrack Pty Ltd
Alcidion UK Limited (Patientrack Holdings
Limited)
Patientrack (UK) Limited
MKM Consulting (UK) Ltd *
Alcidion NZ Limited (MKM Health (NZ) Ltd)
Australia
New Zealand
Australia
Australia
England & Wales
England & Wales
England & Wales
New Zealand
100
100
100
100
100
100
N/A
100
100
100
100
100
100
100
100
100
* MKM Consulting (UK) Ltd was a dormant company which was acquired with the acquisition of Patientrack Holdings Limited but subsequently de-
registered.
30. GUARANTEES
Alcidion Corporation Pty Limited has entered into guarantees, as disclosed at Note 23.
31.
CAPITAL COMMITMENTS
As at 30 June 2020, the Group had no contracted capital commitments for capital purchases (2019: NIL)
59
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ANNUAL REPORT – ADDITIONAL SHAREHOLDERS’ INFORMATION
FOR YEAR ENDED 30 JUNE 2020
ADDITIONAL SHAREHOLDERS’ INFORMATION
Alcidion Group Limited’s issued capital is as follows:
ORDINARY FULLY PAID SHARES
At the date of this report there are the following number of Ordinary fully paid shares
Balance at the beginning of the year
Movement of share capital during the year and to the date of this report
Total number of shares at the date of this report
Number of shares
805,671,138
185,022,914
990,694,052
SHARES UNDER OPTION
At the date of this report there are no unissued ordinary shares in respect of which options are outstanding.
Balance at the beginning of the year
Unlisted options
Listed options
Movements of share options during the year and to the date of this report
Total number of options outstanding at the date of this report
Number of options
10,000,000
-
-
(10,000,000)
-
No person entitled to exercise any option referred to above has had, by virtue of the option, a right to participate in any
share issue of any other body corporate.
SUBSTANTIAL SHAREHOLDERS
Alcidion Group Limited has the following substantial shareholders (including related parties) as at 11 August 2020:
Name
Professor Malcolm Pradhan
Mr Raymond Blight
Isle of Wight Pty Ltd
Caledonia Nominees Pty Ltd
Kate Quirke
Number of
shares
134,582,403
100,578,081
70,563,015
60,702,358
56,542,557
Percentage of
issued capital
13.58
10.15
7.15
6.13
5.71
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ANNUAL REPORT – ADDITIONAL SHAREHOLDERS’ INFORMATION
FOR YEAR ENDED 30 JUNE 2020
RANGE OF SHARES AS AT 11 AUGUST 2020
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - > 100,001
Total
Total Holders
Units
115
1,018
1,202
3,143
787
6,265
15,388
3,738,497
9,649,134
115,508,713
861,782,320
990,694,052
% Issued
Capital
0.00
0.38
0.97
11.66
86.99
100.00
UNMARKETABLE PARCELS AS AT 11 AUGUST 2020
Minimum $500.00 parcel at $ 0.2150 per unit
Minimum
parcel size
3,449
Holders
Units
547
1,209,416
TOP 20 HOLDERS OF ORDINARY SHARES AS AT 11 AUGUST 2020
Name
1 Mr Malcolm Pradhan
2 Mr Raymond Blight
3
Isle of Wight Pty Limited
4 Caledonia Nominees Pty Limited
5
J P Morgan Nominees Australia Pty Limited
6 Mrs Katrina Doyle
7 Rangiora-London Pty Limited
8 Rewmicman Pty Limited
9 MNMD Pty Limited
10 HSBC Custody Nominees (Australia) Limited
11 MKMS Investment Pty Limited
12 Mr Colin MacKinnon + Mrs Maree MacKinnon
13 Citicorp Nominees Pty Limited
14 Mr Michael Buist + MRS Sarah Buist
15 Rewmicman Pty Limited
16
The Andromeda Group Pty Limited
17 Emerald Shares Pty Limited
18 Dr Michael Buist
19
JBWere (NZ) Nominees Limited
20 Mr Vivek Ramakrishnan + Miss Nisha Srinivasan
Total of Top 20 holders of ORDINARY SHARES
Units
%
134,582,403
13.58
95,828,781
49,405,192
49,221,085
36,720,940
27,793,199
26,602,251
26,026,606
17,168,086
15,449,926
11,481,273
9,676,550
8,124,310
8,010,280
7,533,835
5,998,133
5,850,000
5,779,039
5,734,603
5,186,789
9.67
4.99
4.97
3.71
2.81
2.69
2.63
1.73
1.56
1.16
0.98
0.82
0.81
0.76
0.61
0.59
0.58
0.58
0.52
552,173,281
55.74
* The holdings presented in the above table represent individual holdings as registered with the Company (reflecting how these would
be presented to shareholders requesting such a Top 20 report). Multiple holdings held by individual shareholders and holdings of
related parties to each director or KMP have not been grouped in the table. The Shares and Options Held By Directors table on
page 12 shows the consolidated equity interest that each director has in the Company.
61
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ANNUAL REPORT – ADDITIONAL SHAREHOLDERS’ INFORMATION
FOR YEAR ENDED 30 JUNE 2020
VOTING RIGHTS
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Other securities
Other classes of securities issued by the Company do not carry voting rights.
ANNUAL GENERAL MEETING
Alcidion Limited advises that its Annual General Meeting will be held on or about Thursday 19 November 2020. The time
and other details relating to the meeting will be advised in the Notice of Meeting to be sent to all Shareholders and
released to ASX immediately upon despatch.
The Closing date for receipt of nomination for the position of Director is Thursday 8 October 2020. Any nominations must
be received in writing no later than 5.00pm (Melbourne time) on Thursday, 8 October 2020 at the Company’s Registered
Office.
The Company notes that the deadline for nominations for the position of Director is separate to voting on Director
elections. Details of the Director’s to be elected will be provided in the Company’s Notice of Annual General Meeting in
due course.
CORPORATE GOVERNANCE STATEMENT
The Company’s 2020 Corporate Governance Statement has been released to ASX on this day and is available on the
Company’s website at: https://alcidion.com/investor-center/corporate-governance/
62
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CORPORATE DIRECTORY
Current Directors (Alcidion Group Limited)
Position
Non-Executive Chair
Managing Director
Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Date of Appointment
01/08/2017
03/07/2018
22/02/2016
22/02/2016
22/02/2016
01/07/2019
Name
Ms. Rebecca Wilson
Ms. Kate Quirke
Prof. Malcolm Pradhan
Mr. Ray Blight
Mr. Nick Dignam
Mr. Simon Chamberlain
Registered office
Level 4
100 Albert Road
South Melbourne VIC 3205
Principal place of office
Level 10
9 Yarra Street
South Yarra VIC 3141
1800 767 873
Website
www.alcidion.com
Auditors
William Buck
Level 6, 211 Victoria Square
Adelaide SA 5000
+61 8 8409 4333
+61 8 8409 4499
DSG
Castle Chambers, 43 Castle Street
Liverpool L2 9TL
England UK
+44 151 294 5400
Accountants
BDO
Level 7, 420 King William Street
Adelaide SA 5000
+61 8 7324 6000
+61 8 7324 6111
63
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Bankers
Westpac Banking Corporation
Westpac Commercial Banking Tower B,
Level 9, 799 Pacific Highway
Chatswood NSW 2067
+ 132 032
Solicitors
Kain Lawyers
315 Wakefield Street
Adelaide SA 5000
+61 8 7220 0931
+61 8 7220 0911
Stock Exchange
Australian Securities Exchange Limited
Exchange Centre
20 Bridge Street
Sydney, NSW 2000
ASX Code: ALC
Company Secretary
Ms Melanie Leydin
Registers of securities
Computershare Investor Services Pty Ltd
Level 5, 115 Grenfell Street,
Adelaide SA 5000
64
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ABOUT ALCIDION
Alcidion Limited (ASX:ALC) has a simple purpose: to transform
healthcare with smart, intuitive technology solutions that meet
the needs of hospital and allied healthcare, worldwide. It offers a
complementary set of software products and services that create
a unique offering in the global healthcare market; solutions
that support interoperability, allow communication and task
management, and deliver clinical decision support at the point
of care to improve patient outcomes. In 2017 Alcidion acquired
Oncall Systems and its Smartpage clinical communication system.
In 2018 it acquired the Patientrack bedside patient monitoring
software and MKM Health, an IT solutions and services provider.
These offerings now operate under the Alcidion brand. With over
25 years of combined healthcare experience, Alcidion brings
together the very best in technology and market knowledge to
deliver solutions that make healthcare better for everyone.
© Alcidion Group Limited 2020. Alcidion, Miya Precision,
Patientrack and Smartpage are registered trademarks.
All other brands and product names and trademarks are
the registered property of their respective companies.
www.alcidion.com
www.alcidion.com
investor@alcidion.com
1800 767 873
Head office:
Level 10, 9 Yarra Street
South Yarra VIC 3141
Australia
For personal use only